MISSISSAUGA, ONTARIO -- (Marketwired) -- 06/18/13 -- easyhome Ltd. (TSX: EH) ("easyhome" or the "Company"), Canada's largest merchandise leasing company and the leading provider of consumer loans as an alternative to traditional banks and payday lenders, today announced that its consumer lending subsidiary, easyfinancial Services, has increased its senior credit facility with Crystal Financial LLC to $50 million from $25 million. As well, the Company has reduced its financing costs going forward as the current interest rate on this senior credit facility has been reduced to 9.98% from 11.78%. When combined with the capital available under the bank revolving credit facility that supports the Company's merchandise leasing business, easyhome now has committed external debt financing totaling $85 million with a blended rate of 7.9% in addition to the $107 million book value of its shareholders' equity.
"The expanded term loan will allow us to capture more of the strong demand for alternative sources of consumer financing in the Canadian marketplace and continue growing our high margin financial services businesses", said Steve Goertz, easyhome's Chief Financial Officer. "We are pleased that Crystal Financial has increased their commitment to support the growth of easyfinancial Services. The reduction in our interest rate will have a meaningful positive impact to our net income beginning in the third quarter."
The Company launched easyfinancial Services in 2006 to provide term financing to consumers who were looking for credit alternatives that are more readily accessible than banks and less costly than payday lenders. Over the past 24 months, easyfinancial Services has grown its consumer loans receivable portfolio by over 140% to $80 million as at May 31, 2013. In the near term, the Company is confident that it will meet or exceed the high end of its loan book target for 2013 of $95 to $100 million.
The Company originally entered into a $20 million credit facility with Crystal Financial LLC on October 4, 2012. Since that time, easyfinancial Services has continued to grow at an accelerated pace while achieving strong financial results. The additional capital secured today will allow easyfinancial Services to maintain its growth and build upon its leadership position as an alternative provider of term financing to consumers. As well, the Company is confident that additional financing for easyfinancial Services, over and above the $50 million credit facility, will be available in the future as required due to the continued fast-paced growth of the consumer loans receivable portfolio.
$32.5 million of the amended facility must be drawn at closing (an increase of $7.5 million over the $25 million previously advanced) with the balance available in periodic advances of $2.5 million as required. The amended facility's maturity date is June 30, 2017.
"We are pleased to expand our term loan facility for easyfinancial Services," said Steven Migliero, Senior Managing Director of Crystal Financial. "From the time we started our initial review process over 12 months ago, the easyhome team has done exactly what they said they would do. The increased size and improved terms on the entire facility reflects our confidence in the strength of the easyfinancial Services team, systems, operating procedures and risk management practices."
Most Popular Stories
- Boehner Lashes Out Against Ted Cruz, Far Right
- TFA Recruiting DACA Recipients
- Hawaii Official Who Release Obama Certificate Only Victim of Plane Crash
- Holiday Shopping Off to a Slow Start This Season
- Ford Plans New Cars, Jobs in 2014
- Gold, Silver Slide on Prospects of Fed Exit
- 'Rape Insurance' Bill Passes in Michigan
- Ted Cruz Coloring Book Selling Briskly
- Kim Jong Un's Uncle Executed
- Scotch Whisky Sales Raise Distillers' Spirits