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NFI Group Announces Amendments to its Credit Facilities

·8 min read

All monetary amounts in this press release are in US dollars unless otherwise noted.

  • NFI has amended the Company's existing $1.25 billion senior revolving credit facility (the "Revolver") and its £50 million revolving UK credit facility (the "UK Facility").

  • The amended facilities provide NFI with relaxed covenants as it recovers from the impacts of the COVID-19 pandemic.

  • In addition to amending the facilities, NFI cancelled the unused $250 million unsecured credit facility it entered into in April 2020 (the "Sidecar"). The Sidecar was intended to provide additional liquidity, if required, which the Company believes it no longer requires.

  • Management believes the Company's cash position, anticipated future revenues and the liquidity from credit facilities are sufficient to support current operations, dividends and strategic initiatives.

WINNIPEG, MB, Dec. 23, 2020 /PRNewswire/ - (TSX: NFI) NFI Group Inc. ("NFI" or the "Company") today announced it has amended the Revolver and the UK Facility (together, the "Facilities"), providing meaningful covenant relief and additional flexibility, and cancelled the $250 million Sidecar.

"NFI is moving forward from the challenging impacts of COVID-19 in a stronger position following the amendments to our credit facilities, which were made possible by the continued confidence and support of our banking partners," said Pipasu Soni, NFI's Executive Vice President, Finance and Chief Financial Officer. "The need to amend our credit facilities was primarily a calculation challenge driven by our trailing financial results that reflect the effect COVID-19 has had on our markets and customers. We anticipate stronger cash flow generation and liquidity in fiscal years 2021 and 2022 as we execute upon our strategic plan and lead the ongoing transition to a zero-emission future."

Under the terms of the amended Facilities, the Company's banking partners have relaxed the total leverage and interest coverage ratios for 2021 and 2022. During 2021, the Company has received a waiver on previous total leverage covenants and will instead need to comply with a total leverage ratio that is based on a conservative downside financial projection for the Company's 2021 fiscal year. During the waiver period NFI will have to comply with a $50 million minimum liquidity covenant and a net debt to capitalization covenant of 70%. Through the amendments, NFI has provided the lenders security on certain of its assets, including a general security agreement on NFI's personal property, but excluding security on real property, until April 3, 2023.

The terms of the amended Facilities do not restrict the payment of dividends, provided the Company is in compliance with the financial covenants and the dividend payments remain at the current level. Copies of the amendments to the Revolver and the UK Facility, which will include additional details regarding the covenants and other terms and conditions, will be posted on SEDAR in due course.

The Bank of Nova Scotia is the Administrative Agent for the Revolver and The Bank of Nova Scotia, BMO Capital Markets, and National Bank Financial Inc. are the Joint Bookrunners. The Revolver syndicate also includes The Canadian Imperial Bank of Commerce; Bank of America, Canada Branch; Wells Fargo Bank, N.A., Canadian Branch; The Toronto Dominion Bank; HSBC Bank Canada; MUFG Bank Ltd., Canada Branch; Export Development Canada and ICICI Bank Canada.

For the UK Facility, HSBC UK acted as Administrative Agent and HSBC UK and the Bank of America, Canada Branch were the two co-lenders and Mandated Lead Arrangers.

Virtual Investor Day 2021 – Leading the ZEvolutionTM

NFI will be holding a Virtual Investor Day on January 11th, 2021. During the event, NFI's Senior Leadership team and Board Directors will provide updates on the Company's business and market conditions, strategic and transformational initiatives, NFI's industry leading zero-emission vehicle program, new products, Environmental, Social and Governance performance, and financial outlook.

To confirm your attendance for the event please RSVP by emailing investor@nfigroup.com. You may also visit nfigroup.com/investor-day-2021/ for more details, relevant information, and registration instructions.

About NFI Group

Leveraging 450 years of combined experience, NFI is leading the battery-electric transition of mass mobility around the world. With zero-emission buses and coaches, infrastructure, and technology, NFI meets today's urban demands for scalable smart mobility solutions. Together, NFI is enabling more livable cities through connected, clean, and sustainable transportation.

NFI is a leading independent global bus manufacturer providing a comprehensive suite of mass transportation solutions in ten countries under brands: New Flyer® (heavy-duty transit buses), Alexander Dennis Limited (single and double-deck buses), Plaxton (motor coaches), MCI® (motor coaches), ARBOC® (low-floor cutaway and medium-duty buses), and NFI Parts™. NFI vehicles incorporate the widest range of drive systems available including: clean diesel, natural gas, diesel-electric hybrid, and zero-emission electric (trolley, battery, and fuel cell). In total, NFI now supports over 105,000 buses and coaches currently in service around the world.

NFI common shares are traded on the Toronto Stock Exchange under the symbol NFI. Further information is available at www.nfigroup.com, www.newflyer.com, www.mcicoach.com, www.arbocsv.com, www.nfi.parts, www.alexander-dennis.com, and www.carfaircomposites.com.

Forward-Looking Statements

Certain statements in this press release are "forward-looking statements", which reflect the expectations of management regarding the Company's future cash flow generation, liquidity, financial performance and results of operations and the Company's strategic initiatives, plans, business prospects and opportunities, including the impact of and recovery from the COVID-19 pandemic. The words "believes", "views", "anticipates", "plans", "expects", "intends", "projects", "forecasts", "estimates", "may", "will" and similar expressions are intended to identify forward looking statements. These forward-looking statements reflect management's current expectations regarding future events (including the recovery of the Company's markets) and the Company's financial and operating performance and speak only as of the date of this press release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved.

Actual results may differ materially and adversely from management expectations set forth in forward-looking statements for a variety of reasons and due to a number of factors. With respect to the effects of the global COVID-19 pandemic, such reasons and factors include: the magnitude and length of the global, national and regional economic and social disruption being caused as a result of the pandemic; the impact of national, regional and local governmental laws, regulations and "shelter in place" or similar orders relating to the pandemic which may materially adversely impact the Company's ability to continue operations; partial or complete closures of one, more or all of the Company's facilities and work locations or the reduction of production rates (including due to government mandates and to protect the health and safety of the Company's employees or as a result of employees being unable to come to work due to COVID-19 infections with respect to them or their family members); production rates may be further decreased as a result of the pandemic; supply delays and shortages of parts and components and disruption to labour supply as a result of the pandemic; the pandemic will likely adversely affect operations of customers and reduce and delay, for an unknown period, customers' purchases of the Company's products; the anticipated recovery of the Company's markets in the future may be delayed or increase in demand may be lower than expected as a result of the continuing effects of the pandemic; the Company's ability to obtain access to additional capital if required; and the Company's financial performance and condition, obligations, cash flow and liquidity and its ability to maintain compliance with the covenants under its credit facilities, which may also negatively impact the ability of the Company to pay dividends. There can be no assurance that the Company will be able to maintain sufficient liquidity for an extended period, obtain future satisfactory covenant relief under its credit facilities, if required, or access to additional capital or access to government financial support or as to when production operations will return to previous production rates. There is also no assurance that governments will provide continued or adequate stimulus funding during or after the pandemic for public transit agencies to purchase transit vehicles or that public or private demand for the Company's vehicles will return to pre-pandemic levels in the anticipated period of time. The Company cautions that due to the dynamic, fluid and highly unpredictable nature of the pandemic and its impact on global and local economies, businesses and individuals, it is impossible to predict the severity of the impact on the Company's business, operating performance, financial condition and ability to generate sufficient cash flow and maintain adequate liquidity and any material adverse effects could very well be rapid, unexpected and may continue for an extended and unknown period of time.

The Company cautions that the foregoing factors are not exhaustive of all potential risks. These factors and other risks and uncertainties are discussed in the Company's press releases, Annual Information Form and materials filed with the Canadian securities regulatory authorities which are available on SEDAR at www.sedar.com. Due to the potential impact of these and other factors, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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SOURCE NFI Group Inc.