NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
CALGARY, Alberta, March 25, 2021 (GLOBE NEWSWIRE) -- Parkland Corporation ("Parkland", "we", the "Company", or "our") (TSX:PKI) is pleased to announce an amended syndicated senior secured credit facility agreement (the “Agreement”) and the establishment of an at-the-market (“ATM”) equity program. Parkland also announced today the closing of its previously announced private placement (the "Offering") of $600 million aggregate principal amount of senior unsecured notes due 2029 (the "Notes"). The Notes bear an interest rate of 4.375% per annum and were priced at par.
“Parkland is in a strong financial position heading into an expected economic recovery,” said Marcel Teunissen, Chief Financial Officer. “Our balance sheet flexibility provides the foundation to execute on our growth strategy. I would like to thank our banking syndicate for their ongoing support and confidence.”
The Agreement increases the amount available under our syndicated credit facilities from approximately $1.7 billion to approximately $1.9 billion. The Agreement has a term of five years, maturing on March 25, 2026, with an effective interest rate that is materially unchanged from the current facility. The Agreement contains minor updates to financial covenants as follows:
Minimum Interest coverage ratio reduced to 2.5 times, from 3.0 times (Q4 2020: 5.33 times)
The temporary maximum Total Funded Debt to Credit Facility EBITDA ratio of 6.0 times effective from Q4 2020 to Q3 2021 has been removed and reverted to 5.0 times (Q4 2020: 2.9 times)
In addition, Parkland has established an ATM program, reinstating a cost effective and flexible financing instrument previously available to us from 2016 to 2018. The ATM program allows Parkland to issue up to $250,000,000 of common shares from treasury ("Common Shares") to the public at Parkland’s sole discretion, at the prevailing market price. Use of the ATM program will be evaluated relative to the cost of other funding options and in consideration of leverage levels.
Additional ATM Program Details
Sales of the Common Shares under the ATM program will be made pursuant to the terms of an equity distribution agreement dated March 25, 2021 (the "Equity Distribution Agreement") with J.P. Morgan Securities Canada Inc. and Canaccord Genuity Corp. (collectively, the “Agents”). The volume and timing of distributions under the ATM program, if any, will be determined at the Company’s sole discretion, subject to applicable regulatory limitations.
The ATM program will be effective until September 17, 2022 unless terminated prior to such date by Parkland or otherwise in accordance with the terms of the Equity Distribution Agreement. As Common Shares sold in the ATM program will be distributed at the prevailing market price at the time of the sale, prices may vary among purchasers during the period of the distribution.
The ATM program is being established pursuant to a prospectus supplement dated March 25, 2021 (the “Prospectus Supplement”) to the Company's short form base shelf prospectus dated August 17, 2020 (the “Shelf Prospectus”). The Prospectus Supplement and the Shelf Prospectus are available on our SEDAR profile at www.sedar.com. The Agents will send copies of the Prospectus Supplement and the Shelf Prospectus via requests made to any of the following:
J.P. Morgan Securities Canada Inc., Attn: Equity Capital Markets, Suite 4500, TD Bank Tower, 66 Wellington Street West, Toronto, ON M5K 1E7 or by phone at 1-416-981-9200 or Canaccord Genuity Corp. Attn: Equity Capital Markets, Suite 3000, Brookfield Place, 161 Bay Street, Toronto, ON M5J 2S1 or by phone at 1-416-869-7368.
This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of, the securities under the ATM program in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful.
Closing of the Offering and related Note Redemptions
Parkland will use the net proceeds of the Offering, together with borrowings under its credit facilities, to redeem: (i) all of the outstanding $300 million aggregate principal amount of its 5.75% Senior Notes (the "5.75% Senior Notes") with a final maturity date of September 16, 2024 on April 9, 2021; and (ii) $300 million of the outstanding $500 million aggregate principal amount of its 5.625% Senior Notes (the "5.625% Senior Notes") with a final maturity date of May 9, 2025 on May 10, 2021, in each case, at the applicable redemption price plus accrued and unpaid interest to the applicable redemption date.
Non-GAAP Financial Measures
This news release refers to certain non-GAAP financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). Interest coverage ratio, Total Funded Debt and Credit Facility EBITDA are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. These measures are defined under, and are used to measure Parkland’s compliance with the financial covenants contained in, Parkland’s credit agreement. See Section 14 of Parkland’s management’s discussion and analysis for the year ended December 31, 2020, dated March 4, 2021 for a discussion of non-GAAP measures and their reconciliations to the nearest applicable IFRS measure. Investors are cautioned that these measures should not be construed as an alternative to net earnings determined in accordance with IFRS as an indication of Parkland's performance.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements”). When used in this news release the words “may”, “will”, “would” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, sales of any Common Shares pursuant to the ATM program, including the price, volume, timing and regulatory approval for any distributions, Parkland’s growth strategy and balance sheet flexibility and the use of proceeds from the Offering and Parkland’s credit facilities.
No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. See the risks and uncertainties described in "Forward-Looking Information" and "Risk Factors" included in Parkland's Annual Information Form dated March 5, 2021 and in "Forward-Looking Information" and "Risk Factors" in the management’s discussion and analysis for the year ended December 31, 2020, dated March 4, 2021, which are filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
About Parkland Corporation
Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.
Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.
For Further Information
Investor Inquiries Brad Monaco Director, Capital Markets 587-997-1447 [email protected]
Media Inquiries Simon Scott Director, Corporate Communications 403-956-9272 [email protected]