Medexus Pharmaceuticals Inc (CVE:MDP) (OTCQB:PDDPF) announced after the bell Thursday that it had agreed to a US$20 million asset-based credit facility, which the company used to pay down US$10 million of a previous term loan.
The ABL facility, arranged by MidCap Financial Trust, has a term of 38 months and a US$20 million revolving commitment with an uncommitted US$10 million accordion. It bears interest at a rate of one month of the London Iner-Bank Offered Rate (LIBOR) plus 3.95% and subject to a LIBOR floor of 1.5%
Medexus used the initial advance from the facility to repay $10 million of the principal outstanding of a US$20 million term loan from February. The interest rate on the new facility is 255 basis points (2.55%) lower than the rate on the term loan.
“We are very pleased to enter into this credit agreement led by MidCap Financial as it further improves our liquidity and enhances our financial flexibility,” CEO Ken d’Entremont said in a statement. “We believe our ability to secure such favourable terms, including an interest rate significantly lower than that of the term loan, reflects the confidence of our lenders and the strength of our business.
“The cash flow from our strong organic growth and recent accretive acquisition makes debt an attractive option to ensure liquidity while minimizing dilution to maximize shareholder value.”
Medexus is a leading specialty pharmaceutical company with a strong North American platform. It is focused on the therapeutic areas of auto-immune disease and pediatrics. The leading products are Rasuvo and Metoject, designed to treat rheumatoid arthritis and other auto-immune diseases; and Rupall, an innovative allergy medication.
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