CALGARY, Sept. 24, 2015 /CNW/ - Rocky Mountain Dealerships Inc. ("Rocky") announced today that it has upsized and amended its syndicated credit facility (the "Credit Facility"), consolidating several sub-facilities into three general lines. The amendment also re-terms the amortizing debt, reducing future scheduled debt repayments.
Canadian Imperial Bank of Commerce ("CIBC") and HSBC Bank Canada acted as Co-Lead Arrangers and Joint Bookrunners on the Credit Facility, with CIBC acting as Administrative Agent. The Bank of Nova Scotia ("BNS"), Rabobank Nederland Canadian Branch ("Rabobank"), De Lage Landen Financial Services Canada Inc. and Alberta Treasury Branches continue to participate in the syndicate, with BNS now acting as Syndication Agent and Rabobank acting as Documentation Agent.
The Credit Facility was upsized to $270 million and provides Rocky with a $70 million operating facility, a $125 million flooring facility, and a $75 million revolving term facility, with the availability of an additional $50 million "accordion" feature. Among the amendments made to the Credit Facility are the inclusion of an interest-only period of 6 months on the term debt and an extension of the amortization period of the term debt to seven years.
Commenting on the amended Credit Facility, David Ascott, Chief Financial Officer of Rocky, said, "We appreciate the continued support of our lenders and the enhancements to our Credit Facility. The amendments to the Credit Facility will allow Rocky to better manage the current economic conditions associated with the low end of the equipment demand cycle and the flexibility to de-lever our balance sheet in future periods. The extended amortization period will allow Rocky to retain approximately $4.3 million of cash generation on an annual basis, thereby providing flexibility on our FCCR covenant, while the interest-only payment period provides us with improved cash-flow for the next 6 months."
Rocky also announced today that it had incurred approximately $0.3 million in after-tax charges in the third quarter of 2015 related to closing the Credit Agreement.
Caution regarding forward-looking statements
Certain information set forth in this news release, including, without limitation, statements that the execution of this new Credit Facility will allow Rocky to better manage the current economic conditions associated with the low end of the equipment demand cycle, statements that the Credit Facility will allow Rocky to de-lever its balance sheet, statements that the new Credit Facility will result in the retention of $4.3 million of cash generation on an annual basis, statements that the Credit Facility will provide flexibility on Rocky's FCCR covenant, and statements about future improved cash-flow for Rocky due to the six-month no interest period contained in the Credit Facility, are forward-looking information within the meaning of applicable Canadian securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Rocky's control. While this forward-looking information is based on information and assumptions that Rocky's management believes to be reasonable, there is significant risk that the forward-looking statements will prove not to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future performance and events to differ materially from that expressed in the forward-looking statements. Accordingly, this news release is subject to the disclaimer and qualified by risks and other factors discussed by Rocky in its management's discussion and analysis ("MD&A") for the quarter ended March 31, 2015, and as discussed in Rocky's Annual Information Form dated March 10, 2015 under the heading "Risk Factors." Except as required by law, Rocky disclaims any intention or obligation to update or revise forward-looking statements, and further reserves the right to change, at any time, at its sole discretion, its current practice of updating its guidance and outlooks.
This press release also contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Rocky's prospective results of operations and cash flows, each of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date hereof and was provided for the purpose of describing Rocky's anticipated future business operations and results. Rocky disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.
Rocky is one of Canada's largest agriculture and industrial equipment dealership networks with branches located throughout Alberta, Saskatchewan, and Manitoba. Through its network of Rocky Mountain Equipment locations, Rocky sells, rents, and leases new and used agriculture and industrial equipment and offers product support and finance to its customers.
SOURCE Rocky Mountain Dealerships Inc.
For further information: Rocky Mountain Dealerships Inc.: Garrett Ganden, President and Chief Executive Officer; or David Ascott, Chief Financial Officer, #301, 3345 8th Street S.E., Calgary, Alberta T2G 3A4, Telephone: (403) 265-7364, Fax: (403) 214-5644