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Retail Supplier Consolidates Credit Facilities, Adds Expanded Syndicated Working Capital Facility

New Credit Facility Improves Pricing, Trading Terms and Availability


August 14, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Crius Energy Trust ("Crius", the "Company" or the "Trust") announced that it has combined its existing credit facilities into a single consolidated credit facility ("Credit Facility") for the Company's wholesale energy supply requirements with a limit of $140 million, and has added a syndicated working capital facility with an initial limit of $110 million for cash advances and letters of credit.

The consolidated and expanded Credit Facility, "provides a significant improvement to pricing and trading terms, as well as increases further financial flexibility and stability as we invest in profitable growth and continue to execute on our strategic initiatives in 2018 and beyond," commented Michael Fallquist, Chief Executive Officer of Crius.

Macquarie Energy LLC and National Bank of Canada are co-leads and joint book-runners of the new Credit Facility.

Crius said that, "The Credit Facility benefits Crius through improved pricing, with the current interest rate on working capital advances of LIBOR plus 5.5% changing to a tiered pricing structure which ranges from LIBOR plus 2.75% to 4.25%, based on leverage levels. Based on current leverage, pricing improves to LIBOR plus 3.0%. The new Credit Facility also results in reduced pricing on the volumetric energy fees applied to the Company's wholesale supply purchases, with the current blended average of $10 per residential customer equivalent per year reducing to approximately $9, based on current customer usage levels. These pricing improvements are expected to result in an estimated annual $3.5 million reduction in financing costs, based on current customer and working capital usage levels. The Credit Facility also provides improved trading terms, which we expect will result in lower wholesale energy procurement costs and therefore improved gross margins. The Credit Facility expands the working capital limit on the current facilities by $15 million to $110 million for the first twelve months, following which it reduces to $100 million. Furthermore, the parties have the flexibility to allocate the incremental $10 million between the working capital and the wholesale energy supply facility as needed during the first twelve months. The Credit Facility extends to August 2021."

Crius said that, "The Company's Total Cash and Availability as of June 30, 2018 of $40.8 million improves to $51.4 million pro forma the new Credit Facility. Additionally, the blended cost of debt on Crius's total debt as of June 30, 2018 of $117.2 million reduces from 8.0% to 6.6% pro forma the new Credit Facility."

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