Dorel Signs New Us$175 Million Five-Year Senior Unsecured Loan Agreement
Montreal, Quebec - 6/17/2019
Dorel Industries Inc. (TSX: DII.B, DII.A) announced that it has entered into a five-year senior unsecured financing with several institutional lenders, led by Sagard Credit Partners LP, pursuant to a new US$175 million term loan agreement. This credit facility is divided into two tranches: (i) a US$125 million tranche that will be fully drawn and used to redeem at par Dorel’s US$120 million 5.5% subordinated convertible debentures maturingon November 30, 2019; and (ii) a US$50 million tranche that will be available for general corporate purposes with the consent of the lenders. This new credit facility will mature five years from the date of the initial advance, bear interest at a rate of 7.5% per annum payable quarterly in cash, rank pari passu with all of Dorel’s other senior unsecured indebtedness and will be guaranteed by certain of Dorel’s subsidiaries.
Upon redemption of the subordinated convertible debentures, the term of the Company’s senior secured revolving credit facilities and term loan will be extended by its senior lenders to July 1, 2021.
“We appreciate the confidence our lenders have clearly demonstrated in Dorel. The conclusion of this new financing, together with our existing senior secured credit facilities, solidifies our balance sheet, providing a strong foundation to support Dorel and its strategy going forward,” stated Martin Schwartz, Dorel President & CEO.
A notice of redemption will be sent to the registered holders of the 5.5% subordinated convertible debentures in accordance with the Trust Indenture dated October 7, 2014. The subordinated convertible debentures will be redeemed at par and in full.