New Flyer Announces the Purchase For Cancellation of 21% of the Total Subordinated Notes Outstanding
Winnipeg, Manitoba, Canada – December 9, 2011 − (TSX:NFI, TSX:NFI.UN) New Flyer Industries Canada ULC (“NFI ULC”), the indirect subsidiary of New Flyer Industries Inc. (“NFI” and together with NFI ULC, “New Flyer” or the “Company”) announced the purchase from certain institutional investors of approximately 21% of its total outstanding subordinated notes held by unrelated parties (including both those forming part of New Flyer’s income deposit securities (“IDS”) and those issued separately from the IDSs).
NFI ULC has purchased an aggregate of approximately C$15.7 million principal amount of the subordinated notes for a purchase price of approximately 107% of the principal amount. NFI ULC intends to cancel the subordinated notes purchased. NFI ULC has obtained the approval of its senior lenders to finance the purchases and related costs by utilizing approximately US$17 million of the US$75 million accordion term loan feature available under the Company’s amended and restated senior credit agreement entered into in July 2011.
Management anticipates a reduction in interest costs of approximately US$1.3 million (on an annualized basis) related to the purchase and cancelation of these subordinated notes given the reduction in the interest rate from 14% payable under the terms of the subordinated notes to a rate of approximately 4% to 5% payable under the terms of the Company’s senior credit facility.
This purchase represents another step in the process of New Flyer’s conversion from the previous IDS structure to a traditional common share structure to, among other things, provide New Flyer with greater financial flexibility to pursue strategic opportunities. As previously announced, management intends to complete the conversion of New Flyer to a common share structure no later than August 2012 when the Company has the right to call the remaining C$58.8 million of subordinated notes, which includes the subordinated notes forming part of the IDSs.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in Canada and the United States. With a skilled workforce of over 2,000 employees, New Flyer is a technology leader, offering the broadest product line in the industry, including drive systems powered by clean diesel, LNG, CNG and electric trolley as well as energy-efficient diesel-electric hybrid vehicles. All products are supported with an industry-leading, comprehensive parts and service network. Further information is available on New Flyer’s web site at www.www.newflyer.com. NFI’s common shares are traded on the Toronto Stock Exchange (the “TSX”) under the symbol NFI and the IDSs are traded on the TSX under the symbol NFI.UN.
Certain statements in this press release are “forward looking statements”, which reflect the expectations of management regarding New Flyer’s future growth, results of operations, performance and business prospects and opportunities. The words “believes”, “anticipates”, “plans”, “expects”, “intends”, “projects”, “estimates” and similar expressions are intended to identify forward looking statements. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, risks and uncertainties, including market and general economic conditions, the covenants contained in New Flyer’s senior credit facility and NFI ULC’s subordinated note indenture and the other risks and uncertainties detailed in the disclosure documents filed with the Canadian securities regulatory authorities. In addition, New Flyer’s ability to complete the conversion to a common share company by acquiring or redeeming the remaining subordinated notes will depend on availability of financing to it for those purposes. New Flyer disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
For further information, please contact:
New Flyer Industries Canada ULC
Glenn Asham, Chief Financial Officer
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