Verano Refinances Debt Extending Maturity Dates

Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) has entered into a credit agreement to refinance its existing $350 million credit facility, extending the maturity date to October 30, 2026. Refinancing comes amidst the company’s new legal battles with its spurned acquisition of Goodness Growth. 

Verano said that the decision to refinance the debt would give the company more flexibility in how it manages its debt. For example, it has $120 million in third-party mortgages secured by real estate that is currently unencumbered. In addition to that, a $100 million accordion under the new credit facility is to be funded at the option of the existing lenders, and a $50 million third-party revolving credit facility upon the passage of cannabis banking legislation.

The refinanced indebtedness bears interest at a floating rate based on the prime rate, with a current rate of 12.75% per annum.

“We’re pleased to continue our partnership with Chicago Atlantic as our credit facility Agent and as a Lender, extending the maturity and securing terms we believe are favorable during this rising interest rate environment,” said George Archos, Chairman, Chief Executive Officer and Founder of the Company. “Importantly, we maintained flexibility around prepayments and the ability to incur additional debt which we believe adds significant value to the deal, especially given the legislative environment that has seen positive momentum build in support of cannabis policy and banking reform. Since Verano’s inception, we have taken a conservative approach to our balance sheet, including avoiding sale leasebacks, which has allowed us to leverage our real estate to bring down our blended cost of debt. This refinancing enables us to continue a selective approach to further strategic opportunities as we position our company for the future.”

Additionally, under the new credit facility, Verano can elect to prepay up to $100 million of outstanding indebtedness at any time by incurring a prepayment fee of $1 million.  Archos is participating in the credit facility as a lender.

The stock fell 2% on the news to lately sell at $5.38.

 

Agrify

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