Curaleaf’s New Senior Secured Term Loan Facility Has No Equity Component
Shares of CURA Stock Jumped 7% in Reaction to the Funding Announcement
Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) announced this morning that its has received commitments from a syndicate of lenders for the purpose of structuring a new USD $275 million financing.
The financing will be set up as a Senior Secured Term Loan Facility and carry with it a 13% per annum interest rate. The loan facility would mature 48 months from closing with interest payable quarterly in arrears. Since the loan facility does not include an equity component, it will not dilute the existing positions of Curaleaf shareholders.
Curaleaf has received commitments for its new loan facility from the company’s current lenders in addition to multiple new U.S. institutional investors. The company makes note that the financing is being led by a syndicate of sophisticated and long-term institutional investors that believe in the cannabis sector’s viability and the overall vision of Curaleaf’s management.
Curaleaf intends to use the proceeds from its new financing to restructure its existing debt, cover expenses from the company’s previously announced acquisitions, fund capital expenditures, pay for transaction fees and for general working capital purposes.
“This transaction is a historic milestone for Curaleaf. Our track record of continuously improving results has attracted a strong group of institutional investors who share our belief that we have established a leading credit profile in the cannabis industry. Importantly, we have raised debt capital at attractive terms without the need to dilute our shareholders. We believe this additional capital fortifies Curaleaf’s balance sheet to take advantage of the significant market opportunities that exist in this space,” stated Curaleaf CEO Joseph Lusardi.
The company reported that Seaport Global Securities LLC will be the sole placement agent for the new loan facility which is subject to the standard closing conditions and expected to close on or around January 10, 2020.
“As our business continues to scale and generate positive free cash flow, this additional capital puts us in a position of strength and provides us with ample liquidity to execute on our strategy. Further, we believe our pending acquisitions, most notably Select and Grassroots will benefit from our expanded balance sheet, both of which are expected to close early next year,” added Curaleaf CFO Neil Davidson.
Today’s CURA Stock Price Action
Shares of Curaleaf’s CSE listed stock closed trading today at $7.42 per share, up 6.9% on the day. Earlier in the day, CURA stock climbed as much as 7.3% on news of the company’s new $275 million non-dilutive financing. South of the border, Curaleaf’s U.S. listed CURLF stock closed today’s trading session up 6.04% at $5.62 per share.
Taking a look at the CURA chart below, it’s becoming clear that the stock has likely bottomed after recently making a new higher low around the $7 area. The Relative Strength Index (RSI) on CURA stock is currently giving a reading of 44.76 and has recently reversed upward with plenty of room to rise. Look for CURA stock to test the $9 level in early 2020.
Move Over Curaleaf, There’s a New MSO in Town and it’s Set to Hit The Street Soon
Get the full details here so you don’t miss out on the next potential 10 bagger.
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.