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Parkland Corporation is pleased to announce an amended syndicated senior secured credit facility agreement (the “Agreement”) and the establishment of an at-the-market (“ATM”) equity program. Parkland also announced today the closing of its previously announced private placement (the “Offering”) of $600 million aggregate principal amount of senior unsecured notes due 2029 (the “Notes”). The Notes bear an interest rate of 4.375% per annum and were priced at par.
“Parkland is in a strong financial position heading into an expected economic recovery,” said Marcel Teunissen, Chief Financial Officer. “Our balance sheet flexibility provides the foundation to execute on our growth strategy. I would like to thank our banking syndicate for their ongoing support and confidence.”
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The Agreement increases the amount available under our syndicated credit facilities from approximately $1.7 billion to approximately $1.9 billion. The Agreement has a term of five years, maturing on March 25, 2026, with an effective interest rate that is materially unchanged from the current facility. The Agreement contains minor updates to financial covenants as follows:
- Minimum Interest coverage ratio reduced to 2.5 times, from 3.0 times (Q4 2020: 5.33 times)
- The temporary maximum Total Funded Debt to Credit Facility EBITDA ratio of 6.0 times effective from Q4 2020 to Q3 2021 has been removed and reverted to 5.0 times (Q4 2020: 2.9 times)
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In addition, Parkland has established an ATM program, reinstating a cost effective and flexible financing instrument previously available to us from 2016 to 2018. The ATM program allows Parkland to issue up to $250,000,000 of common shares from treasury (“Common Shares”) to the public at Parkland’s sole discretion, at the prevailing market price. Use of the ATM program will be evaluated relative to the cost of other funding options and in consideration of leverage levels.
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