Organigram gets C$140 million three-year credit facility led by BMO

By Wendy Van Sickle

Columbus, Ohio, May 31 – Organigram Holdings Inc. closed a C$140 million credit facility led by Bank of Montreal, according to a news release.

The credit facility consists of a C$115 million term loan and a C$25 million revolver, both maturing in May 2022.

There is also a C$35 million uncommitted accordion.

Organigram drew C$50 million of the term loan on closing and can continue to draw down additional funds under the term loan through Nov. 30.

Principal repayments on the term loan will commence on Feb. 28, 2020 at a rate of 2.5%, or about $2.9 million, per quarter.

The company may repay the facilities without penalty at any time.

Pricing is a set margin over the BMO’s Canadian dollar Prime rate or a Bankers’ Acceptance rate, which may increase or decrease based on a grid linked to the company’s debt to EBITDA coverage at each quarter-end.

Interest is expected to be in the high 4% to low 5% per annum range, based on current rates and the highest level of the pricing grid.

The banking syndicate also includes three other banks.

“Our current expansion plans are fully funded as we continue to remain on track for completion of phases 4 and 5 of our campus,” Greg Engel, chief executive officer of Organigram, said in the release.

Organigram Holdings is the Moncton, New Brunswick-based parent company of Organigram Inc., a licensed producer of medical marijuana.

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