High Liner Foods Incorporated, a leading North American value-added frozen seafood company, announced today that it concluded amendments to its senior secured term loan and asset-based revolving loan facility. RBC Capital Markets acted as lead arranger and bookrunner for the debt amendments.

The principal amendments to the Term Loan B are summarized as follows:

• Reduction in applicable interest rates for loans under the facility from LIBOR plus 5.5% (with a 1.5% LIBOR floor), to LIBOR plus 3.5% (with a 1.25% LIBOR floor);
• Leverage covenants which are more favorable to the company;
• Increased capacity for capital expenditures, distributions and repurchases; and
• Increased flexibility and capacity for permitted investments and acquisitions by the company.

The principal amount, maturity and amortization terms of the Term Loan B were not changed by the amendments.

Management expects that the company will realize material benefits as a result of the amendments to the Term Loan B. Based on the company's expected mandatory repayments under the Term Loan B, and assuming no market valuation adjustments on the LIBOR floor-related embedded derivative1, we estimate that financing costs (including the change in deferred financing costs) in 2013 will be reduced by $6.2 million ($4.7 million in cash interest), and over the remaining term of the loan by approximately $33 million ($24 million of cash interest). After applicable income taxes, the increase in income for 2013 is estimated to be $4.5 million ($0.30 per basic share).

Due to the magnitude of the interest savings arising from the amendments, accounting rules require the deferred costs related to the original placement of the Term Loan B to be expensed. Net deferred financing costs of $8.7 million ($6.3 million after tax) as at the end of 2012 will thus be expensed in 2012 earnings as financing costs. Transaction costs associated with the amendment of an estimated $1.3 million ($0.9 million after tax) will be expensed in 2013.

In addition, the ABL Facility was amended concurrently with amendments to the Term Loan B. The principal ABL Facility amendments include improved interest costs. The company expects the amendments to the ABL Facility will result in savings of between $150,000 and $250,000 during 2013, with additional savings thereafter during the term, depending on the amount drawn under the ABL Facility.