NFI's Q1 Win: How National Bank Just Gave Investors a Green Light

Let me tell you, folks, this is a deal that’s got me excited! NFI Group, a leader in electric buses and transportation solutions, just locked in a major partnership with National Bank of Canada that could supercharge its growth. And the timing? Right in the heart of Q1 2025. Let’s break this down—because this isn’t just a credit facility; it’s a strategic move that could make NFI a must-watch stock.

The Deal: $845M Credit Facility—A Game-Changer for NFI
In early May 2025, NFI announced a new $845 million First Lien Senior Credit Facility, replacing its older $801 million credit lines. Here’s why this matters: National Bank of Canada is front and center as the Administrative Agent, managing compliance and oversight. Their affiliate, National Bank Financial Inc., also acted as a Co-Lead Arranger alongside top Canadian banks like Scotiabank and BMO. This syndication isn’t just a loan—it’s a vote of confidence from institutions that know transportation finance inside out.

Why This Facility Is a Win for NFI’s Q1
Let’s start with the numbers. NFI’s Q1 2025 liquidity rose to $127.9 million—up $1.1 million from Q4 2024—but the real boost came with this new credit facility. By May, NFI had a $845M war chest to fund its record-breaking $13.7 billion backlog—a 16.4% revenue jump to $841.4 million. Brian Dewsnup, NFI’s CFO, called it a “strategic pivot” to lower interest costs and free up cash for growth. And here’s the kicker: 33.9% of Q1 deliveries were zero-emission buses (ZEBs), proving demand for green tech is real.

The Terms: Flexibility Meets Discipline
The facility isn’t just about size—it’s about terms. The two-year term (extendable to four if NFI secures subordinated credit) gives the company runway to execute its backlog. Interest rates are tied to benchmarks like SOFR and CORRA, which are favorable in a low-rate environment. But here’s the catch: NFI must meet strict financial covenants, including:
- Total Leverage Ratio <4.75x by Q2 2026.
- Interest Coverage Ratio rising to 2.50x by mid-2026.
- A $50M liquidity covenant kicks in Q3 2025.

This isn’t loose money—it’s a structured lifeline. But NFI’s Q1 results show they’re ready: their Adjusted EBITDA rose, and they’re on track to meet those ratios.

The Big Picture: NFI’s Green Future and Risks
NFI isn’t just borrowing—it’s betting on zero-emission tech. With governments globally pushing for greener transit, NFI’s ZEB dominance (33.9% of Q1 sales) positions it as a leader. But there are risks. Supply chain hiccups and currency fluctuations (since loans are in USD, CAD, GBP, and EUR) could bite. Plus, maintaining those covenants requires tight financial management.

Yet the National Bank partnership adds a safety net. Their roles as both arranger and agent mean they’re incentivized to help NFI succeed. And with $127.9M in liquidity post-deal, NFI has the cash cushion to weather storms.

Investor Takeaways: Why This Deal Matters
1. Liquidity Boost: The $845M facility isn’t just a number—it’s a shield against volatility.
2. ZEB Growth: NFI’s 33.9% ZEB deliveries signal a shift to high-margin, in-demand products.
3. Banking Backing: National Bank’s deep involvement (they’ve been partners since 2022) shows institutional trust in NFI’s vision.

Final Verdict: NFI Is a Buy—But Keep an Eye on Covenants
This deal is a huge win for NFI. With a record backlog, green tech momentum, and banking firepower, the company is primed to grow. The stock’s performance since Q1 (check that