goeasy Ltd. Announces Pricing of US$400 Million of Senior Unsecured Notes

In the ever-evolving landscape of consumer lending, goeasy Ltd. has made a bold move that could reshape its financial trajectory. The Canadian company, known for its non-prime leasing and lending services, recently announced the pricing of US$400 million in senior unsecured notes due 2030. This financial maneuver is not just a strategic play but a reflection of the company's ambition and its willingness to navigate the complexities of the global financial market.

The issuance of these notes, guaranteed on a senior unsecured basis by certain of goeasy's current and future subsidiaries, is a significant step. The company expects to enter into a currency swap agreement to fix the foreign currency exchange rate for the proceeds from the offering. This move is expected to reduce the effective cost of borrowing of the Notes when converted into Canadian currency, a shrewd financial strategy that underscores goeasy's proactive approach to managing its debt.



The net proceeds from the offering, estimated to be approximately C$566.4 million, will be used to partially repay indebtedness under its secured facilities and for general corporate purposes. This action is a clear indication of goeasy's intent to optimize its debt structure, reducing its reliance on secured debt, which is generally more costly and restrictive than unsecured debt. The company's decision to issue senior unsecured notes at a competitive interest rate of 7.375% suggests that it has access to favorable borrowing terms, which could translate into lower borrowing costs in the future if market conditions remain stable or improve.

The potential implications for goeasy's credit rating are also noteworthy. Credit rating agencies often view a balanced debt structure more favorably, as it indicates a company's ability to manage its debt obligations effectively. The currency swap agreement, by mitigating the impact of foreign exchange fluctuations on its borrowing costs, demonstrates goeasy's proactive approach to managing its debt, which could be seen positively by credit rating agencies.

However, the strategic advantages goeasy gains from entering into a currency swap agreement go beyond cost reduction. The agreement helps in managing foreign exchange risk, providing stability and predictability in goeasy's financial planning and operations. This risk management strategy supports goeasy's growth plans, allowing the company to allocate more resources towards its growth initiatives, such as expanding its loan portfolio and enhancing its financial services offerings.

The issuance of these notes is not just a financial transaction but a reflection of goeasy's broader strategy. The company, which has served over 1.5 million Canadians and originated over $16.0 billion in loans, is clearly positioning itself for future growth. Its omnichannel model, which includes online and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in various verticals, is a testament to its innovative approach to consumer lending.

In conclusion, goeasy Ltd.'s announcement of the pricing of US$400 million in senior unsecured notes is a significant development in the consumer lending sector. The company's strategic use of a currency swap agreement to manage foreign exchange risk and reduce borrowing costs, along with its proactive approach to debt management, positions it well for future growth. As goeasy continues to navigate the complexities of the global financial market, its actions serve as a reminder of the importance of strategic financial planning and risk management in achieving long-term success.