Business
Hardwoods Distribution Income Fund Announces New Canadian Credit Facility
Toronto Stock Exchange - HWD.UN LANGLEY, BC, Aug. 7 /CNW/ - Hardwoods Distribution Income Fund (t...
About this update from Adentra Inc
[{"type":"text","content":"\n\n\n\nToronto Stock Exchange - HWD.UN\n\n\nLANGLEY, BC, Aug. 7 /CNW/ - Hardwoods Distribution Income Fund (the\n"Fund") (TSX: HWD.UN) today announced it has entered into a new revolving\ncredit facility available to the Fund's Canadian operating subsidiary,\nHardwoods Speciality Products LP ("Hardwoods LP"). The Fund owns an 80%\nindirect interest in Hardwoods LP. The new credit facility replaces Hardwoods\nLP's previous credit facility, which was set to expire in November 2009.\n\n\nNew Canadian Credit Facility Highlights\n\n- The new credit facility provides financing of up to $15.0 million\n ($12.0 million previously), and is for a three-year term maturing\n August 7, 2012.\n\n- The new credit facility can be drawn down to meet short-term\n financing requirements such as fluctuations in non-cash working\n capital, or to make capital contributions to the Fund's U.S.\n operating subsidiary\n\n- The new credit facility permits borrowings up to 85% of the book\n value of certain eligible accounts receivable (80% previously), and\n up to the lesser of 85% of appraised value or 65% of the book value\n of eligible inventory (60% previously)\n\n- Hardwoods LP will be subject to one financial covenant under the new\n credit facility: a Fixed Charge Coverage Ratio ("FCCR"). Calculated\n for Hardwoods LP on a trailing 12-month basis, the FCCR is not to be\n less than 1.1. The calculation of the FCCR is as follows:\n (EBITDA - capital expenditures - cash taxes) / (interest expense)\n\n- Distributions from Hardwoods LP are permitted to be made to the\n extent that after giving effect to the distribution, the FCCR\n covenant is in compliance, and the amount of distributions made on a\n trailing 12-month basis does not exceed Distributable Cash plus cash\n on hand during the same 12-month period\n\n- Interest will be charged at a rate of prime rate plus 2.0% on prime\n rate loans, and Bankers' Acceptances plus 3.5% on BA revolver loans\n\n- Hardwoods LP paid the lender a one-time closing fee of $75,000 plus\n closing costs to enter into the new facility. The fee and closing\n costs will be amortized over the three-year term of the credit\n facility.\n\n\n"We are pleased to have replaced our expiring Canadian bank arrangement\nwith a new three-year agreement that offers excellent terms," commented\nM...