(Estimated annual interest savings of over $5 million)
(Toronto: February 26, 2018) Quantum International Income Corp. (the "Corporation" or "Quantum") (TSXV: QIC) is pleased to announce that, acting on behalf of Lucky Bucks, LLC ("LB"), Quantum's portfolio company, it has signed a commitment letter (the "Commitment Letter") with Goldman Sachs Specialty Lending Group, L.P. ("GSSLG") for a US$75 million multi-draw credit facility. This new debt facility reduces LB's primary credit facility effective interest rate from ~18% to ~8% (subject to LIBOR fluctuation) which will result in estimated annual interest expense savings of greater than US$5 million.
"We are pleased to announce the refinancing of our transition, acquisition-oriented debt to a longer term senior debt facility" said Manu K. Sekhri, Chief Executive Officer of Quantum and added "we believe the rate of interest now more accurately reflects the risk profile of the business, in addition, we expect savings to shareholders on interest payments to be in excess of $5 million annually. After an extensive lender selection process, we feel GSSLG's familiarity with Georgia and transaction-oriented expertise will best complement Quantum's acquisition driven business model going forward".
Credit Facility Details
The agreement will be comprised of a multi-draw credit facility consisting of a term loan ("Term Loan Facility") and a multi-draw term facility ("MDTL Facility") (collectively the "Credit Facilities")The proceeds of the Credit Facilities will be used for refinancing LB's existing debt facility, financing future acquisitions, working capital and other general corporate purposes.
The Credit Facilities will be available to LB on agreed upon terms including, but not limited to, the following:
- The full amount of the Initial Term Loan Facility will be drawn on the initial funding date ("Initial Funding Date").
- The MDTL Facility will be available to be drawn for permitted acquisitions from the Initial Funding Date to the date that is 24 months afterwards. Draws under the MDTL Facility will be subject to pro forma compliance with, among other things, the financial maintenance covenants set forth in the documentation for the Credit Facilities.
- The interest rate under the Credit Facilities is based on a pricing grid tied to the LB's leverage ratio. The interest rate at close will be approximately 8% based on LIBOR funding plus the applicable margin (with LIBOR subject to a floor of 1% per annum).
- The Maturity Date is expected to be 5 years after the Initial Funding Date.
LB's ability to draw on the Credit Facilities is subject to, among other things, borrowing covenants and conditions precedent typical to these credit facilities of this type and size, including the execution of definitive credit documentation. LB will pay GSSLG a facility fee, un-drawn facility commitment fee under the MDTL Facility, and an annual administration fee, all of which are typical to these arrangements.
About Quantum International Income Corp.
Quantum International Income Corp. is a gaming company. Quantum's vision is to build a diversified portfolio of world class gaming operations. The Corporation looks to enhance shareholder value by growing organically and through acquisitions. The Corporation has an active acquisition strategy with a particular focus on cash-flows and high margins. Currently, the Corporation is the largest operator of skill-based gaming machines in the State of Georgia.
More information on Quantum is available at www.quantumincomecorp.com.
|For further information please contact Quantum:
Vice President, Corporate Affairs
Tel. (416) 569-3292
Tel. (416) 477-3411
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Cautionary Statement Regarding Forward-Looking Information
This release contains certain information which, as presented, constitutes “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information involves statements that relate to future events and often addresses expected future business and financial performance, containing words such as “expect” and “intend”, statements that an action or event “may” or “will” be taken or occur, or other similar expressions. These statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Corporation to control or predict, and which may cause Quantum’s actual results, performance or achievements to be materially different from those expressed or implied thereby, including, but not limited to, risks related to the inability by Quantum to complete the Acquisition, as well as other factors discussed in the Corporation’s annual information form dated July 23, 2015, (the “Annual Information Form”) which is available on SEDAR under Quantum’s profile at www.sedar.com. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, in the Annual Information Form, and as otherwise disclosed from time to time on SEDAR under Quantum’s profile at www.sedar.com.
Unless otherwise specified in this release, information contained in this release is current as of the date of this release. Unless otherwise specified, all dollar amounts herein refer to Canadian dollars. The Corporation undertakes no obligation to update forward-looking statements except as may be required by applicable Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.