AYR Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) closed on a $40 million refinancing and upsizing of its existing mortgage for its Gainesville cultivation facility with Needham Bank. Just two weeks ago, Ayr made a deal to defer principal payments on $69 million worth of debt.
“The refinancing and upsizing of our Gainesville mortgage is the latest in a series of actions aimed at further strengthening Ayr’s balance sheet. Today’s action replaces our existing mortgage with a lower interest rate, extends the maturity to 10 years, and provides us with additional capital to invest further in the facility and the company’s Florida business,” Brad Asher, chief financial officer at Ayr Wellness, said. “We believe the growth opportunity in Florida is greater than any other market in the country given its population, tourism, and potential for converting to adult-use sales in the coming years.”
The company said it would use the money to pay down its existing Gainesville mortgage of $25.3 million, which was due to mature in May 2024, and invest further in the facility and the company’s Florida business. The new loan carries an interest rate of 5-year FHLB Rate + 4%, which currently implies a rate of 8.26%.
Ayr Wellness was able to negotiate contingent agreements to defer principal or amortization payments for two years on an aggregate principal amount of approximately $69 million of debt obligations, including contingent agreements with holders of approximately $60.5 million of vendor take-back promissory notes, representing 67.4% of the outstanding principal amount of all vendor notes maturing before 2027.
The company also reached contingent agreements to defer the maturities of $4.5 million of other promissory notes, as well as a $4 million amortization payment due in December 2023. Ayr Wellness said it has successfully pushed out payments on $96 million worth of debt.
As a result of these moves, Ayr noted that interest rate adjustments that will result in a blended interest rate increase of approximately 0.5% across the $69 million aggregate principal amount. The company said it agreed to pay amendment fees of $0.4 million that will be capitalized to the principal amount of certain vendor notes.