Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer products in cannabis, today announced that it has closed its previously announced private placement of 8.0% Senior Secured Notes due 2026 (the “Notes”), with a settlement date of December 15, 2021, for aggregate gross proceeds of US$425 million (the “Offering”). The Notes are governed by a trust indenture that was entered into on closing of the Offering (the “Indenture”).
The Indenture enables the Company to issue additional notes on an ongoing basis as needed, subject to maintaining leverage ratios and complying with the other terms and conditions of the Indenture. In addition, the Indenture permits up to US$200 million of senior bank financing.
The net proceeds from the Notes will be used to refinance existing indebtedness, for working capital, and to pay transaction fees and expenses. The Notes were issued at 100% of face value, are senior secured obligations of the Company, and bear interest at a rate of 8.0% per annum, payable semi-annually in equal installments until the maturity date, unless earlier redeemed or repurchased. The Notes will mature on December 15, 2026.
“We are pleased to successfully complete what we believe is the largest debt financing of any publicly-traded MSO to date, underscoring our leading market position and strong financial profile,” said Joseph Bayern, Chief Executive Officer of Curaleaf. “With the closing of this offering and refinancing of our existing debt, we have meaningfully reduced the average interest rate on our outstanding debt. In addition, by strengthening our already solid balance sheet and gaining increased flexibility to raise additional debt financing as needed, Curaleaf is extraordinarily well-positioned to execute both organic and M&A growth initiatives and continue building leading brands.”
Seaport Global Securities LLC and Canaccord Genuity Corp. (the “Agents”) acted as placement agents for the Notes in the United States and Canada, respectively.
The Notes were offered for sale on a private placement basis in certain provinces and territories of Canada pursuant to applicable exemptions from the prospectus requirements of Canadian securities laws. The Notes were also offered in the United States to or for the account or benefit of “U.S. persons” (as defined in the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)), on a private placement basis to “qualified institutional buyers” and “accredited investors” pursuant to an exemption from the registration requirements of the U.S. Securities Act, and in such jurisdictions outside of Canada and the United States as agreed upon by the Agents and the Company, in each case in accordance with applicable laws. The Notes issued are subject to a customary four-month hold period under Canadian securities laws.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The Notes have not been and will not be registered under the U.S. Securities Act or any state securities laws. Accordingly, the Notes may not be offered or sold within the United States or to or for the account or benefit of “U.S. persons” unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.
