Concert Industries Consolidates Debt into C$145 Mln Deal
Concert Industries closed a C$145 million deal in late September to consolidate five loans into one deal. Carey Edwards, cfo, said consolidating debt offers greater flexibility and a better interest rate. The company stuck with original lender National Bank of Canada because of its longstanding relationship with the bank. "They offer the best flexibility as well as business-like approach to banking," Edwards said. Concert Industries, based in Toronto, makes pulp-based products that are used in a wide range of items including baby wipes and home cleaning materials.
The financing breaks down into a $25 million, 364-day extendable operating facility and a $120 million, five-year term loan. Proceeds of the short-term facility will go towards additional working capital and for general corporate purposes, while the term loan will be used to replace existing debt.
Edwards says the company began pursuing the refinancing four months ago "when the markets were stronger." The credit consolidation comes in line with the company gaining control of all of its subsidiaries. The company chose bank debt financing partly because bond financing is not available to it right now. "The company is unrated, so it would be difficult for us to get in bonds," Edwards said. "From the size of the company, bank debt financing is conventional. We converted our project financing into more conventional financing. We've strengthened our EBITDA and cash flow on a company wide basis to support the consolidation of our debt." The company's EBITDA was $18 million last year. There are four Canadian banks in the syndicate.