TORONTO--(BUSINESS WIRE)--Accord Financial Corp. (“Accord” or the “Company”) (TSX – ACD) today announced that it has entered into amendments to its primary credit facility with its banking syndicate. As disclosed in its third quarter report, in November 2023, the Company uncovered significant irregularities in collateral reporting by a borrower related to a $14.4 million loan, which led the Company to record a specific provision for credit losses relating to this loan. Since that time, the Company has been operating under a series of facility agreement waivers, which provided temporary relief from a technical default caused by a reduction in permitted borrowings as a result of the loan. The amendments announced today modify certain elements of the facility agreement, providing a longer-term resolution through to the facility’s maturity in July 2025.
The amendments reset the total facility limit to be more appropriate to the Company’s current tangible equity and current level of borrowings. The facility limit has been reduced from $375 million to $300 million and will be reduced further to $260 million by January 2025. In addition, a minimum availability covenant along with certain financial and operating covenants will result in more conservative leverage overall, which we consider prudent in the current economic climate.
About Accord Financial Corp.
Accord Financial is North America's most dynamic commercial finance company providing fast, versatile financing solutions including asset-based lending, factoring, inventory finance, equipment leasing, trade finance and film/media finance. By leveraging our unique combination of financial strength, deep experience and independent thinking, we craft winning financial solutions for small and medium-sized businesses, simply delivered, so our clients can thrive.
Forward-Looking Statements
This news release contains certain "forward-looking statements" and certain "forward-looking information" as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the financial position of the Company, the collectability of the account under investigation described above, the effect the foregoing may have on the funding available to maintain the Company’s current pace of portfolio growth, and the duration of the temporary suspension of the quarterly dividend announced in November 2023. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties including risks associated with the collectability of the account under investigation, the ability of the Company to reinstate dividends and those risks identified in the Accord's periodic filings with Canadian securities regulators. See Accord's most recent annual information form and most recent management’s discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
