Vector Capital expands loan facilities
By Josh White
Date: Monday 12 Jun 2023
(Sharecast News) - Commercial lender Vector Capital updated the market on its loan facilities on Monday, including those provided by Vector Holdings, reporting that it had extended its wholesale banking facilities and increased its loan facility with Vector Holdings.
The AIM-traded company said its wholesale bank debt providers had expanded the debt facilities by £5m, bringing the total wholesale bank facilities available to Vector Capital to £45m.
That increase would allow the company to drawdown £2.5m for loans secured by second charges, enabling cautious and selective expansion of Vector's loan book into higher margin loan agreements.
In addition to the extension of wholesale banking facilities, Vector Capital had extended its loan facilities with Vector Holdings.
On 29 December last year, the terms of an inter-company debt agreement for a £3m loan were extended.
The extended debt agreement included an interest rate of 6.25% per annum, accruing daily and payable quarterly on the last business day of March, June, September, and December.
Vector said the liability was unsecured, and was set to be repaid on 31 December 2024.
Under the relationship agreement dated 18 December 2020, Vector Holdings was prohibited from demanding repayment of the liability without the prior written consent of at least two independent directors, except in the event of an insolvency.
During a board meeting on 9 June this year, the board of Vector Holdings agreed to increase the loan facility from £3m to £4m.
All other terms relating to the intercompany debt and the relationship agreement remained unchanged.
The revised terms would provide Vector Capital with access to competitively-priced finance, significantly below the rate offered by third-party funders.
"We are very pleased to announce the extension and broadening of our wholesale debt facilities and the extension of competitively priced debt facility from Vector Holdings," said chief executive officer Agam Jain.
"These facilities, combined with our resilient pipeline of new loan opportunities and the strength of our loan management systems, provides a base from which to target future growth as interest rates stabilise."
Reporting by Josh White for Sharecast.com.
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