HLS Therapeutics obtains $107M in credit facilities

Mr. John Hanna reports HLS THERAPEUTICS ANNOUNCES NEW CREDIT AGREEMENT HLS Therapeutics Inc. has entered into a new credit agreement with National Bank of Canada as administrative agent, which provides for committed credit facilities denominated in Canadian dollars of up to $107-million (approximately $77.5-million (U.S.)). National Bank serves as administrative agent and lead arranger, with Toronto-Dominion Bank, Royal Bank of Canada and Innovation Federal Credit Union as syndicate members. The agreement replaced HLS's credit facility with JP Morgan Chase Bank NA, which had a maturity date of Aug. 11, 2026. On closing, the proceeds from the new term facility were used to repay the company's existing credit agreement in full. The new agreement has a maturity date of Aug. 19, 2029. The agreement consists of a $79-million term credit facility, a $14-million delayed draw facility and a $14-million revolving credit facility. In addition, HLS can increase facilities further through an uncommitted $40-million accordion facility (subject to lender agreement). Interest on the agreement accrues at a rate per month equal to the sum of the Canadian overnight repo rate average (CORRA) plus a range of 2.25 per cent to 3.50 per cent depending on the leverage ratio of the company at the time. Interest rate spreads are 25 to 50 basis points below the rate in the company's prior credit agreement, providing improved cash flow through reduced interest expense. The debt is denominated in Canadian dollars, creating a natural currency hedge against the company's predominantly Canadian operations. In addition to the interest rate spread savings detailed above, HLS will achieve further interest rate savings in excess of 100 basis points based on current market interest rates as a result of the differential between U.S.-dollar and Canadian-dollar base rates. "We are pleased to finalize this new credit agreement with National Bank and our syndicate partners, which reflects their confidence in our outlook," said John Hanna, chief financial officer of HLS Therapeutics. "The agreement delivers improved terms that reflect our strengthened financial position and provides enhanced financial flexibility and cash flow to pursue our capital allocation priorities such as share buybacks and portfolio expansion." About HLS Therapeutics Inc. Formed in 2015, HLS is a pharmaceutical company focused on the acquisition and commercialization of late-stage development and commercial-stage promoted and established branded pharmaceutical products in the North American markets. HLS's focus is on products targeting the central nervous system and cardiovascular therapeutic areas. HLS's management team is composed of seasoned pharmaceutical executives with a strong record of success in these therapeutic areas and at managing products in each of these life cycle stages. We seek Safe Harbor.