Catalyst Capital Group‘s latest distressed-for-control fund is expected to have a 75 percent participation interest in new loans issued by Callidus Capital Corp (TSX: CBL), a Canadian specialty lender and Catalyst portfolio company. Catalyst Fund LP V‘s interest is expected to be repurchased by Callidus within four to six quarters of the fund’s first close at par and with a pro-rata guarantee. Participation in new Callidus loans is contingent on Fund V closing at or above its initial target of US$1.25 billion. The fund raised US$650 million in a first tranche in April. Callidus, which lends mostly to distressed businesses, reported growth in its gross loans receivable since May to $1.053 billion.
Callidus Capital Corporation Reports Continued Strong Loan Book Growth
TORONTO, July 13, 2015 /CNW/ – Callidus Capital Corporation (“Callidus” or the “Company”) (TSX: CBL), a provider of flexible and innovative asset-based loans, primarily to distressed or troubled companies, today provided an update on the growth of the loan book.
We are pleased to report that as at July 8, 2015, our gross loans receivable were $1.053 billion, with an aggregate committed amount of $1.28 billion. This represents a $143 million or 16% increase from our position on May 11, 2015 when we reported gross loans receivable of $910 million. Additionally, our pipeline of potential new loans is currently approximately $800 million. Of particular importance is that approximately $400 million of the pipeline represents signed back term sheets, an increase of $192 million, or 92% from what was reported as of May 11, 2015.
Of the $1.053 billion of gross loans receivable mentioned above, approximately $34 million, represented Catalyst’s participation interest in new loans subsequent to March 27, 2015, the first close of Fund V. This $34 million will be derecognized from the Callidus balance sheet.
Catalyst advises that it expects Fund V to close at or above its initial target of USD $1.25 billion. At that level, Catalyst is expected to have a 75% participation interest in new loans. We also expect Catalyst’s participation interest in these new loans to be repurchased by Callidus within 4 to 6 quarters of the first close of Fund V, (i) at par, and (ii) with a pro-rata guarantee.
The credit quality of our loans remains sound. We do not anticipate a material change in our previously disclosed annual loan loss provision target of 1.5 to 2%.
As stated before, we plan to increase our leverage as our loan portfolio continues to grow. Total net debt as a percentage of gross loans receivable was 50% at July 8, 2015 up from 43% as at May 11, 2015.
Going forward, it is our intention to inform the market when the size of the loan portfolio changes by approximately 10%.
About Callidus Capital Corporation
Established in 2003, Callidus Capital Corporation is a Canadian company that specializes in innovative and creative financing solutions for companies that are unable to obtain adequate financing from conventional lending institutions. Unlike conventional lending institutions who demand a long list of covenants and make credit decisions based on cash flow and projections, Callidus credit facilities have few, if any, covenants and are based on the value of the company’s assets, its enterprise value and borrowing needs. Callidus employs a proprietary system of monitoring collateral and exercising control over the cash inflow and outflows of each borrower, enabling Callidus to very effectively manage any risk of loss.
Certain statements made herein contain forward-looking information. Although Callidus believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. Furthermore, the forward-looking statements contained in this press release are made as at the date of this press release and Callidus does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
This press release contains references to gross loans receivable, which is not a generally accepted accounting measure under International Financial Reporting Standards and therefore the definition used by the Company may differ from the definition of such term used by other entities. The Company defines “gross loans receivable” as the sum of (i) the aggregate amount of loans receivable on the relevant date, (ii) the loan loss allowance on such date, (iii) the book value of assets held for sale as they appear on the balance sheet, and (iv) discounts on loan acquisitions. Management believes that gross loans receivable is a useful supplemental measure that may assist purchasers in assessing the financial performance and the cash anticipated to be generated by the Company’s business. Gross loans receivable should not be considered as the sole measure of the Company’s performance and should not be considered in isolation from, or as a substitute for, analysis of the Company’s financial statements.
SOURCE Callidus Capital Corporation
For further information: Jean Lepine, Director Investor Relations, Callidus Capital Corporation, Phone: 416-945-3023, E-mail: email@example.com; David Reese, President and Chief Operating Officer, Callidus Capital Corporation, Phone: 416-945-3016, E-mail: firstname.lastname@example.org, www.calliduscapital.ca
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