Decibel Cannabis (TSXV: DB) is increasing its outstanding debt with a lender so as to be able to repay outstanding convertible debt. The additional funds come from connectFirst Credit Union, whom the currently last year entered into a credit facility with.
The amended credit facility will see the company receive a total of $54 million in debt capital, consisting of $40.5 million in term debt, a $6.0 million receivables facility, as well as accordion debt of $7.5 million. The arrangement will see the firm add $12 million in funding to the currently outstanding term loan, which the company expects will allow for the repayment of outstanding convertible debentures.
The firms convertible debentures currently having $12.0 million in principal outstanding. They come due on May 10, 2022.
The new debt taken on by the company consists of a 5-year term, with the interest rate sitting at 4.75% for the term loan, while the receivables facility, also referred to as “authorized overdraft,” bears interest at prime + 1.00%, and the accordion facility sees interest accrue at prime + 2.00%.
Decibel Cannabis last traded at $0.15 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
