NFI Group Announces Entry Into New Credit Facility
Winnipeg, Manitoba, Canada – October 25, 2018: (TSX: NFI) NFI Group Inc. (“NFI”) the largest bus and motor coach manufacturer and parts distributor in North America, today announced that it and certain of its subsidiaries (collectively, the “Company”) has entered into a revolving credit facility (the “Credit Facility”) with a total borrowing limit of $1.0 billion, which includes a $100 million letter of credit facility. The Credit Facility is unsecured, has a 5-year term and will mature on October 25, 2023. In addition, the Credit Facility provides an accordion feature which allows the Company to obtain additional funding of up to $250 million, subject to customary conditions. The Credit Facility refinances and replaces the Company’s existing secured credit facility, which had a total borrowing limit of $825 million.
Loans under the Credit Facility bear interest at a rate equal to LIBOR or a U.S. base rate for loans denominated in U.S. dollars and a Canadian prime rate or bankers’ acceptance rate for loans denominated in Canadian dollars, plus an applicable margin to those rates.
There are certain financial covenants under the Credit Facility that must be maintained. Specifically, the Company must maintain an interest coverage ratio greater than 3.0 to 1 and a total leverage ratio (“TLR”) of less than 3.75 to 1. NFI desires to maintain a TLR of around 2.0 to 2.5. Within NFI’s desired range of TLR, the cost of borrowing is expected to decrease approximately 30 basis points compared to the previous secured credit facility.
The Bank of Nova Scotia is the Administrative Agent under the Credit Facility and Bank of Nova Scotia, BMO Capital Markets and National Bank Financial Inc. are the Co-Lead Arrangers. The Credit Facility has been syndicated, with the lenders comprised of the three lead banks and eight other financial institutions, all of whom were parties to the previous credit facility.
“We are very pleased with our new credit facility and the strong and continued support received from our banking partners,” said Paul Soubry, NFI’s President and Chief Executive Officer. “The credit facility’s size, unsecured structure, and improved covenants provides us with flexibility to pursue numerous strategic initiatives to grow and diversify our business. It’s an exciting step that will support NFI’s future growth.”
All references to “$” in this press release are to U.S. dollars.
About NFI Group Inc.
With nearly 6,000 team members, operating from 31 facilities across Canada and the United States, NFI is North America’s largest bus manufacturer providing a comprehensive suite of mass transportation solutions under several brands: New Flyer® (heavy-duty transit buses), ARBOC® (low-floor cutaway and medium-duty buses), MCI® (motor coaches), and NFI Parts™ (parts, support, and service). NFI buses incorporate the widest range of drive systems available including: clean diesel, natural gas, diesel-electric hybrid, and zero-emission electric (trolley, battery, and fuel cell). For the fiscal year ended December 31, 2017, NFI posted revenues of US $2.4 billion. NFI common shares are traded on the Toronto Stock Exchange under the symbol NFI. News and information are available at www.nfigroup.com.
This press release may contain forward-looking statements relating to expected future events and financial and operating results of NFI that involve risks and uncertainties. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions, and the other risks and uncertainties discussed in the materials filed with the Canadian securities regulatory authorities and available on SEDAR at www.sedar.com. NFI 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:
Group Director, Corporate Development and Investor Relations
NFI Group Inc.