Entrec Corporation, the Alberta, Canada-based heavy haul transportation and crane solutions provider has obtained a five-year extension to its senior secured asset-based credit facility (the ABL Facility) with a syndicate of lenders led by We

The syndicate of lenders also includes Bank of Nova Scotia, Canadian Western Bank and Toronto-Dominion Bank.

Jason Vandenberg, Entrec's chief financial officer, explained: "This extension provides long-term stability to our equipment financing needs and provides us the financial flexibility we need to execute on our growth strategies over the coming years."

The ABL Facility now matures on October 10, 2022 and will continue to require payments of interest only. Along with the extension, a number of amendments were made to the ABL Facility, including, a voluntary reduction in the ABL Facility to USD172.5 million from USD240 million previously, which will result in lower stand-by fees, and the removal of the accordion feature to increase the ABL Facility by a further USD75 million.

Revisions have been agreed to the sliding scale pricing levels, which will generally result in a 75 basis point increase in the interest rate applicable at each pricing level.

Elimination of the springing senior leverage ratio covenant, which was replaced with a springing fixed charge coverage ratio (FCCR) covenant of 1.0x. The FCCR covenant will only apply should Entrec's excess borrowing capacity decline to an amount below the lesser of either 12.5 percent of Entrec's total borrowing capacity or 12.5 percent of the company's total ABL Facility of USD172.5 million.

At August 31, 2017, Entrec's excess borrowing capacity of USD31.5 million exceeded this threshold.  At August 31, 2017, Entrec FCCR, as defined in the credit agreement, was 1.26x.

The new arrangement has a requirement to maintain a minimum excess borrowing capacity of USD15.0 million at all times; and demands the Entrec's convertible debentures due June 30, 2021 be repaid or extended prior to March 31, 2021. If the convertible debentures are not repaid or extended prior to March 31, 2021, the maturity date of the ABL Facility will also be March 31, 2021.