TORONTO, Nov. 24, 2014 /CNW/ - Callidus Capital
Corporation ("Callidus" or the "Company") (TSX: CBL), a provider of
flexible and innovative asset-based loans, announced today that
investment funds managed by The Catalyst Capital Group Inc.
("Catalyst Funds") have advanced to the Company approximately USD
$50 million pursuant to a
subordinated bridge loan facility. Additional advances to the
Company of up to USD $150 million may
be made by the Catalyst Funds under this facility, for a total
commitment of USD $200 million.
Advances under the facility are intended to be used by the Company
to fund growth in its loan book.
As previously disclosed, the Catalyst Funds had approved making
loan facilities available to the Company and Callidus' board had
approved these facilities in principle, subject to complying with
applicable related party regulatory requirements. The Company
has determined that it is now appropriate to access these
facilities due to continuing robust growth in its loan book.
As previously disclosed, Callidus' gross loans receivable at
November 4, 2014 was $684 million as compared with $381 million at December
31, 2013. Notwithstanding this significant growth, no
loans in Callidus' loan portfolio are non-performing and there have
been no realized loan losses over that period.
The Catalyst Funds are "related parties" of the Company for the
purposes of applicable securities laws as they beneficially own,
control or direct approximately 57.5% of the Company's issued and
outstanding common shares and approximately 56.2% of the common
shares on a fully diluted basis.
The bridge loan ranks subordinate to the Company's existing debt
facilities. The final terms of the bridge loan remain subject
to negotiation but will be consistent with terms applicable between
arm's length parties for similar subordinated credit facilities and
will be subject to approval by the independent directors of
Callidus.
Callidus intends to repay the bridge loan at such time as more
efficient and less costly forms of capital are available.
Callidus is continuing to explore financing sources including but
not limited to both the private and public capital markets to
ensure adequate and diversified funding sources. These sources
include seeking increased availability from Callidus' existing
lenders, other secured debt, convertible debt and other equity
linked forms of financing. However, as previously
disclosed, Callidus considers the current market conditions for an
equity offering to be unfavourable given the high cost of capital
and has therefore determined to continue to explore other options
and to avail itself of the bridge loan during such time.
Callidus considers its current and contemplated sources of
liquidity, including amounts made available by the Catalyst Funds,
sufficient to meet its requirements for the purposes of short term
and long term operations and growth. Management currently
intends that, notwithstanding significant growth in the Company's
loan book and the expectation of continuing rapid growth, it will
fund operations by increasing the leverage rate until such time as
other sources of financing are available on terms that better
reflect the Company's performance. The Company's long term
intention is to target a 40% leverage rate although, as previously
disclosed, in the shorter term leverage could be allowed to exceed
that rate. As at November 4,
2014, the Company's leverage rate, or the percentage of
total debt to gross loans receivable, was 36%. Management has
determined that, at leverage rates of approximately 62%, the
Company would have sufficient capital to finance its loan
portfolio, including the anticipated growth. Therefore the
board is allowing the leverage ratio to exceed the targeted level
until such time as the board determines that the cost of capital
from other sources of financing is appropriate.
About Callidus Capital Corporation
Established in 2003, Callidus Capital Corporation is a Canadian
company that specializes in innovative and creative financing
solutions for companies that are unable to obtain adequate
financing from conventional lending institutions. Unlike
conventional lending institutions who demand a long list of
covenants and make credit decisions based on cash flow and
projections, Callidus' credit facilities have few, if any,
covenants and are based on the value of the company's assets, its
enterprise value and borrowing needs. Callidus employs a
proprietary system of monitoring collateral and exercising control
over the cash inflow and outflows of each borrower, enabling
Callidus to very effectively manage any risk of loss.
Forward-Looking Statements
Certain statements made herein contain forward-looking
information. Forward-looking statements in this release include
those related to expected growth in the loan portfolio, repayment
of the bridge loan and sufficiency of sources of liquidity.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors and assumptions that may cause the
actual results, performance or achievements of Callidus, or
developments in Callidus' business or industry, to differ
materially from the anticipated results, performance or
achievements or developments expressed or implied by such
forward-looking statements. Such factors and assumptions include,
but are not limited to, Callidus' inability to successfully
originate new loans due to competitive factors or adverse
developments in the asset-based loans market; the availability of
additional financing on acceptable terms, or at all, being
dependent on capital market conditions and the operating
performance of Callidus; the continued availability of funding
under bridge loan facility provided by Catalyst Funds and Callidus'
existing loan facilities; and other factors and assumptions
discussed in the section entitled "Risk Factors" in documents filed
with the Ontario Securities Commission and other securities
commissions across Canada,
including Callidus' prospectus dated April
15, 2014. If any such risks actually occur or assumptions
prove to be incorrect, Callidus' business, financial condition or
results of operations could be materially adversely affected.
Readers are cautioned not to place undue reliance upon any
such forward-looking statements, which are made as at the date of
this press release and Callidus does not undertake any obligation
to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws.
SOURCE Callidus Capital Corporation