ANNOUNCES SIGNING OF SENIOR SECURED CREDIT AGREEMENT Cresco Labs Inc. has entered into a non-brokered credit agreement for a senior secured term loan in an initial aggregate principal amount of up to $100-million (U.S.), with a mutual option to increase the size of the facility to a maximum of $200-million (U.S.). The Company expects to complete an initial drawdown of up to US$100 million on or about January 30, 2020, subject to the satisfaction of customary funding conditions.
The proceeds from the Senior Loan will be used to fund the expansion of operations in Illinois, closing and integration costs associated with pending acquisitions, and other strategic growth initiatives in key markets.
"This agreement reflects the strength and growth potential of the national platform Cresco has built as well as our ongoing commitment to execute a superior capital agenda for the benefit of shareholders," said Charlie Bachtell, CEO and Co-founder of Cresco Labs. "Through this deal, we have diversified the Company's funding sources, improved our cost of capital in a non-dilutive manner and given ourselves flexibility in a dynamic capital environment. As we enter 2020 and our business continues to increase its positive free cash flow, Cresco is well-positioned to continue growing its foothold in the most strategic cannabis markets in the U.S., while building the most important company in the industry."
Terms
Commitments under the Senior Loan are provided by a broad syndicate of lenders, including U.S. based institutional investors, demonstrating confidence in Cresco's strategic position and reflecting the strong growth outlook for the US cannabis industry. Members of the Company's management and board of directors will also be participating as investors in the Senior Loan. Each commitment under the Senior Loan may be for an 18-month or 24-month term, at the lender's option. Loans made on the initial closing date will bear interest at a rate of approximately 12.7% per annum for 18-month loans and approximately 13.2% for 24-month loans, payable quarterly in arrears. The terms of the Senior Loan were negotiated at arm's length with the agent and lead investor and include customary restrictive covenants.