Softchoice Corp. of Toronto (TSX: SO) has confirmed it has entered into a long-term credit agreement with Bank of America and HSBC Capital Canada to provide the solution provider with access to up to $140 million in debt financing.
This new arrangement replaces Softchoice’s current Asset-backed loan. Softchoice had received an extension for this loan for short term debt to the March 31 of this year. The original $45 million term loan needed to be repaid on December 31, 2008. The new financing has been used to pay down only a portion of the original debt.
The new capital structure will include a three-year $115 million revolving asset-backed loan facility funded by Bank of America, as an agent, with syndicate participation from the Bank of Montreal and TD Asset Finance.
The five year $25 million term loan funded by HSBC with participation from the Ontario Teachers’ Pension Plan.
A portion of the proceeds from this financing has been used to repay another Softchoice debt of US$21.3 million.
On closing, the asset-back loan has more than $40 million of unutilized capacity in its credit lines.
Anne Brace, Softchoice CFO, said that these expanded credit facilities provide Softchoice with a cost effective structure to meet the company’s capital requirements. With these agreements in place, Softchoice can continue to pursue long term growth objectives with the knowledge that the capital needed to fund it is in place.
