Columbia Care Inc. (NEO: CCHW) (CSE:CCHW) (OTCQX:CCHWF) (FSE: 3LP) has completed a private placement of $185 million aggregate principal amount of 9.50% senior-secured first-lien notes due in 2026.
The Transaction Details
The offering was conducted on a “best-efforts” basis pursuant to an agency agreement entered into on February 2, 2022, between the company and a syndicate of agents.
The 2026 notes are senior secured obligations of the company and were issued at 100% of face value. They accrue interest payable semi-annually in arrears and mature on February 3, 2026, unless earlier redeemed or repurchased.
The net proceeds from the offering are intended to be used to fund capital expenditures, strategic acquisitions and general corporate purposes.
In connection with the offering, the company has received binding commitments to exchange approximately $31.75 million of its existing 13% senior secured notes due 2023, pursuant to private agreements in accordance with the trust indenture, for an equivalent amount of 2026 Notes plus accrued but unpaid interest and any negotiated premium thereon.
As a result of the note exchanges, Columbia Care received aggregate gross proceeds of $153.2 million in cash pursuant to the offering.
Columbia Care said that it may redeem the 2026 Notes at par, in whole or in part, on or after February 3, 2024, as more particularly described in the fourth supplemental trust indenture governing the 2026 notes.
Canaccord Genuity Corp. acted as the sole lead agent and lead bookrunner, and ATB Capital Markets Inc. acted as co-bookrunner in connection with the offering.
Management Commentary
“This non-dilutive financing provides Columbia Care with additional flexibility to continue executing on our strategic growth initiatives, especially in markets like New Jersey, New York and Virginia, where we are serving a growing number of medical patients and preparing for adult use on the horizon,” Nicholas Vita, CEO of Columbia Care, said. “We have reduced our overall cost of capital and are grateful to our investors who recognize our improved credit profile and understand the catalysts ahead.”
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