California vertically-integrated cannabis company Glass House secured a new $50 million credit line.
The senior-secured loan agreement carries a balloon payment of $40 million on the maturity date of Jan. 31, 3030, according to a press release.
The interest rate is fixed at 8.58% for the entire term of the loan, with interest-only payments the first two years of the deal.
Some of the proceeds are earmarked to pay back $41 million in outstanding debt from a $100 million senior secured loan agreement in 2021.
That loan, financed by WhiteHawk Capital Partners, was set to mature in November 2026, the company said.
Other proceeds will fund working capital and general corporate purposes, according to Glass House.
“Refinancing the credit facility strengthens our balance sheet, significantly improves our cash flow and pushes out the maturity of our senior secured debt into 2030,” cofounder and CEO Kyle Kazan said in a released statement.
“I’m particularly excited that our company has finally received debt with a rate and terms which are comparable to non-cannabis businesses.”
The new loan is secured by a first priority lien on the operator’s Camarillo, Padaro and Casitas greenhouse farms and facilities in California and a first priority lien on its assets, excluding other real estate.
Key covenants include:
- Minimum liquidity of $10 million held at the lending institution throughout loan term.
- Consolidated Fixed-Charge Coverage Ratio (FCCR) of at least 1.25x tested quarterly on a trailing-12-month basis. The FCCR is a financial metric that gauges a company’s ability to pay fixed costs such as rent, utilities, and debt payments.
Glass House shares trade as GLAS.A.U on the Cboe Canada stock exchange and GLASF on the over-the-counter markets.
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