CALGARY, Alberta--(BUSINESS WIRE)--Walton Westphalia Development Corporation (the “Corporation”) is pleased to announce that it has repaid all outstanding debt to its senior lender having successfully refinanced its multi-use project in Prince George's County, Maryland (the "Project"). The debt repayment and refinancing allows the Corporation to continue to develop the Project, delivering lots to homebuilders, and preparing land for retail and commercial uses. This allows for the continued momentum at Westphalia Town Center.
Under the terms of the refinancing, the Corporation has accepted the first advance of funds from a subordinated mezzanine loan program with WWMN, LLC, an affiliated company of Walton Global Investments Ltd. for aggregate gross proceeds of $18.68 million (the “New Loan Program”), maturing in June 2021.
The proceeds of the New Loan Program were used to repay the Corporation’s outstanding debt obligations due to its senior lender and to repay certain additional unsecured, subordinated debt of the Corporation. The balance of the proceeds raised will be used for general working capital purposes. The Corporation anticipates completing one or more additional closings of the New Loan Program in the coming months. The New Loan Program has a maximum gross limit of $30 million.
Concurrent with the closing of the New Loan Program, the Corporation has also entered into an agreement to amend the terms of its existing secured mezzanine loan (the “Existing Loan”), which was previously extended in November 2017. Pursuant to the amendment, the mezzanine lender has agreed to extend the maturity date from July 15, 2018 to October 15, 2018 and to decrease the rate on the Existing Loan from 17.5% to 12%, with the Existing Loan moving into the first loan position. The mezzanine lender has also agreed that if the Existing Loan is repaid in full by September 30, 2018, the 3% repayment fee shall be waived and additional favourable incentives shall be granted to the Corporation.
“The repayment of the Corporation’s senior debt and the refinancing of the Project have allowed the project to improve its working capital position and continue the momentum of Phase 1 development and sales”, said Bill Doherty, Chief Executive Officer of the Corporation. “Our objectives are to complete the refinancing of the debt capital stack by the end of September, carry on with the development of Phase 1, and support the County with the expected issuance of the TIF bonds later in 2018 that will be used to upgrade the infrastructure benefitting the entire project and surrounding community.”
The Project is currently negotiating terms with a potential new senior lender with which the Corporation executed a non-binding term sheet for new senior financing on June 27, 2018. In addition, the County and the underwriter continue their due diligence and preparation for a TIF bond issuance later this year.
The Corporation is managed by Walton Global Investment Ltd. and the development of the Project is managed by Walton Development & Management (USA), Inc., both of which are members of the Walton Group of Companies.
The Walton Group of Companies (“Walton”) is a multinational real estate investment, planning, and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors.
Its communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Its goal is to build communities that will stand the test of time: hometowns for present and future generations.
This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com