Business
Allen-Vanguard announces commitment letter from RBC Capital Markets for new credit facilities
- Three year $200 million term loan and $50 million revolver to replace existing senior debt - Su...
About this update from Verisante Technology, Inc.
[{"type":"text","content":"\n\n\n\n- Three year $200 million term loan and $50 million revolver to replace\n existing senior debt\n- Substantially reduced debt service requirements\n\n\nOTTAWA, March 27 /CNW Telbec/ - Allen-Vanguard Corporation (the "Company"\nor "Allen-Vanguard") (TSX: VRS) of Ottawa, Canada today announced that it has\nexecuted a commitment letter for secured credit facilities underwritten by RBC\nCapital Markets, consisting of a three-year $200 million term loan facility\n("Term Loan") and a $50 million revolving credit line ("Revolver"). The\ninterest rates on the Term Loan and Revolver will be finalized at closing and\nare expected to be substantially lower than the interest rates on the\nCompany's existing senior debt. The Term Loan will be repayable in quarterly\nprincipal payments of $10 million, plus additional quarterly payments ranging\nfrom 50% to 75% of excess cash flow, with any remaining principal repayable\nupon the maturity date of the Term Loan. Formal documentation of the credit\nfacility is expected to be completed on or before April 25, 2008 ("Closing\nDate").\n\n\nThe Company will utilize the Term Loan to repay the outstanding balance\non its existing senior debt facilities, expected to be approximately\n$180 million on the Closing Date, plus a prepayment penalty equal to 5% of the\noutstanding balance.\n\n\nThe Company notes that these new credit facilities replace the\nhigher-cost debt the Company took on in conjunction with the acquisition of\nMed-Eng in September 2007. "We are very pleased to obtain this committed\nfinancing from RBC Capital Markets, particularly at this time of adverse\ncredit market conditions," said David E. Luxton, President & CEO. "Our lenders\nat the time were instrumental in enabling us to execute a transformational\nacquisition of Med-Eng in difficult credit market conditions. The substantial\ncash flow from Med-Eng has enabled us to rapidly reduce debt by applying all\navailable cash to debt payment. The new credit facilities substantially lower\ndebt service requirements, strengthen our cash position, and give us more\nflexibility to pursue growth opportunities.\n\n\nForward looking statements\n\n\nThis press release may contain forward-looking statements, which reflect\nAllen-Vanguard's current expectations regarding ...