Accord seeks debentureholder OK for amendments

Executive Summary

• Accord Financial Corp. has secured a short-term extension of its main credit facility from December 15, 2025, to December 23, 2025, to allow time to finalize amendments extending the maturity to February 2026.
• The company plans to hold a special meeting of debentureholders on January 27, 2026, to vote on amendments to its 10% unsecured subordinated debentures due January 31, 2026.
• Proposed amendments include extending the debenture maturity to July 31, 2026, increasing the interest rate to 12%, and waiving the breach caused by the deferral of the December 31, 2025, interest payment.

Key Details

• Credit Facility Extension:
  • Current facility extended from Dec. 15, 2025, to Dec. 23, 2025.
  • Goal is to finalize amendments to extend the maturity date to February 2026.
• Debenture Amendment Proposal:
  • Instrument: 10% unsecured subordinated debentures due Jan. 31, 2026.
  • Meeting Date: Jan. 27, 2026.
  • Maturity Extension: Extended from Jan. 31, 2026, to July 31, 2026.
  • Interest Rate Increase: Increased from 10% to 12% effective Jan. 31, 2026.
  • Interest Calculation: Debentureholders will receive 12 months of accrued interest: 10% for the period July 1, 2025, to Jan. 30, 2026, and 12% for the period Jan. 31, 2026, to July 31, 2026.
  • Breach Waiver: Waiver of the breach of indenture caused by the failure to pay interest on the Dec. 31, 2025, interest payment date.
  • Deferral: Interest due on Dec. 31, 2025, will be deferred and paid on the new July 31, 2026, maturity date, subject to approval.
  • Approval Threshold: Requires an extraordinary resolution of at least 66-2/3rds per cent of the principal amount of debentures present and voting.
  • Effective Date: Expected Jan. 27, 2026, subject to TSX approval.
• Strategic Initiatives & Refinancing Plan:
  • Asset Sale: Non-binding letter of intent signed on Dec. 11, 2025, for the sale of a majority of loans of Accord Financial Inc. (AFIU).
  • Impact of Sale: Expected to refocus business on the Canadian market and reduce outstanding debt by approximately $45 million.
  • Lender Discussions: Continuing with potential lenders to refinance the bank facility, contingent on the completion of the AFIU transaction.
  • Board View: Board believes the capital structure will be better positioned to support refinancing of debentures on or before July 31, 2026, following these transactions.
  • Default Avoidance: Approval is critical to avoid a default scenario on the Jan. 31, 2026, maturity date.
• Trading Status:
  • Debentures trade on the Toronto Stock Exchange under symbol ACD.DB.
  • Expected to trade on an interest flat basis following the announcement.

Notable Quotes

• "Accord's refinancing plan is advancing, supported by constructive discussions with the lenders and the recently signed letter of intent in respect of the AFIU transaction. While there is no assurance that the strategic initiatives will yield a successful result, approval of the proposed debenture amendments is essential to completing the refinancing plan and repaying the debentures." — Simon Hitzig, President and CEO
• "In addition, the interest rate increase to 12 per cent per annum commencing Jan. 31, 2026, through July 31, 2026, compensates debentureholders for the additional time to maturity and the deferral of the Dec. 31 interest payment." — Simon Hitzig, President and CEO