PHOENIX, AZ, May 24, 2016 /PRNewswire/ - Global Water
Resources, Inc. (NASDAQ: GWRS, TSX: GWR) (the "Company") announced
today that it has entered into a Note Purchase Agreement to issue
two series of senior secured notes for a total principal amount of
$115 million at a blended interest
rate of 4.55%. The new notes provide for no principal
payments during the first five years of the term.
The Company will use the proceeds to refinance its existing
long-term debt of $107 million and
pay the associated prepayment penalties of $3.2 million. The remaining proceeds will
be used by the Company for general corporate purposes. The
transaction is expected to close on June 24,
2016.
"We were able to negotiate extremely favorable terms," said
Ron Fleming, Chief Executive
Officer. "This transaction marks the completion of a four year
strategy to position the Company for the long term. We are
very pleased with this outcome and look forward to the
opportunities this provides us as we look to grow into the
future."
"We expect this debt refinancing to significantly improve our
annual cash flow and combined with the elimination of $9 million in debt reserve, this provides us the
liquidity to make strategic decisions that focus on growing the
long term value of the Company," added Mike
Liebman, Chief Financial Officer.
The terms of the agreement are as follows:
- Series A: $28.75 million at an
interest rate of 4.38%, with a 12 year bullet payment due
June 15, 2028.
- Series B: $86.25 million at an
interest rate of 4.58%, over 20 years, with interest-only payments
in the first five years, followed by $3.8
million annual principal payments thereafter (made
semi-annually, with the first payment of $1.9 million due on December 15, 2021).
- No debt reserve requirement.
About Global Water Resources, Inc.
The Company is a water resources company located in Phoenix, Arizona, that owns and operates
regulated water, wastewater and recycled water utilities in the
metropolitan Phoenix area.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes certain forward-looking
statements. These forward-looking statements include, but are not
limited to, the expected use of proceeds, the timing of closing,
the expected improvements in cash flow and other statements that
are not historical facts as well as statements identified by words
such as "expects", "anticipates", "intends", "plans", "believes",
"seeks", "estimates", or the negative of these terms, or other
words of similar meaning. These statements are based on our current
beliefs or expectations and are inherently subject to significant
uncertainties and changes in circumstances, many of which are
beyond our control. Actual results may differ materially from these
expectations due to changes in global political, economic,
business, competitive, market and regulatory factors and other
factors. We undertake no obligation to publicly update any
forward-looking statement, except as required by law, whether as a
result of new information, future developments or
otherwise.
SOURCE Global Water Resources Inc.