IROC Energy Enters New $75.5 Million Credit Facility
IROC Energy Services has entered into a new $75.5 million credit facility with a syndicate of lenders arranged by National Bank Financial as Lead Arranger and Sole Bookrunner, including National Bank of Canada as Administrative Agent and Lender, and Canadian Western Bank and Alberta Treasury Branches as Lenders.
The new credit facility consists of an extendible revolving operating credit facility of $12.5 million and an extendible revolving term facility of up to $63 million available to finance equipment purchases for organic growth and potential acquisitions. The new credit facilities have replaced IROC's existing $50 million credit facilities with the Canadian Western Bank.
The new credit facilities currently bear interest at the bank's prime rate plus 1.25% which interest rate may decline depending on specific levels of the Corporation's financial ratios. The facilities are renewable annually, subject to mutual consent of the syndicate of lenders and the Corporation maintaining compliance with certain financial covenants. The extendable revolving operating credit facility and the extendable revolving term facility require interest payments only during the term of the facility. To the extent that the revolving term facility is not renewed, debt repayments on the facility would be amortized and repaid over a three-year period.
Tom Alford, President and CEO of IROC commented that "we are pleased that the National Bank of Canada, Canadian Western Bank and Alberta Treasury Branches has chosen to participate in our business and future growth. The addition and commitment of two new lenders in this syndicate is a reflection of their confidence in the quality and diversity of our assets as well as the operating strength of our Company. This new facility will provide IROC with increased flexibility in the current operating environment and enable our Company to react to growth opportunities as they present themselves." Additionally, Mr. Alford indicated that "the new facility will reduce overall interest costs significantly for IROC."