Accord Financial Announces Proposed Debenture Amendments

Accord Financial Corp. (TSX – ACD) (“Accord” or the “Company”) today announced that it will seek the approval of the holders (the "Debentureholders") of its 7% convertible unsecured subordinated debentures due December 31, 2023 (the "Debentures") to amend certain terms of such Debentures at a special meeting of the Debentureholders to be held at 5300 Commerce Court West, 199 Bay St., Toronto, ON M5L 1B9 on August 10 at 10:00 a.m. (Eastern Daylight Time) (the "Meeting").

The proposed amendments (the "Amendments"), presented as a comprehensive package, consist of the following:

1. Increasing the interest rate on the Debentures from 7% to 10%, which increase would be effective as of January 2, 2024 in accordance with the requirements of the Toronto Stock Exchange (“TSX”);
2. Extending the maturity date of the Debentures from December 31, 2023 to January 31, 2026;
3. Removing the conversion right of the Debentureholders;
4. Removing the Company’s right to repay the principal amount of the Debentures in common shares of the Company ("Common Shares") on the new maturity date or any redemption date; and
5. Providing that the Debentures are not redeemable prior to February 1, 2025 except in the event of a change of control as provided in the Company’s trust indenture dated December 18, 2018, as supplemented by the first supplemental indenture dated September 13, 2019.

Accord’s board of directors unanimously recommends that Debentureholders vote IN FAVOUR of the Amendments, noting that the Amendments provide the following advantages to Debentureholders:

1. Increased Interest Rate: Increasing the interest rate from 7% to 10% provides an attractive yield to Debentureholders;
2. Extension of the Maturity Date: Extending the maturity date gives Debentureholders a longer time period over which to receive the higher interest rate;
3. Removal of Share Repayment Right: Removing the Company’s right to repay the principal amount in Common Shares provides more certainty as to the form and value of principal at maturity or any redemption date;
4. Consent fee: Any Debentureholder that votes for the Amendments will receive a cash consent fee (the "Consent Fee") of $20 per $1,000 principal amount of Debentures held by that Debentureholder as of June 26, 2023 (the "Record Date") provided that certain other conditions required for the payment of the Consent Fee are satisfied, including the Amendments are validly approved by Debentureholders and the TSX.

Accord’s board of directors highlights that the increased interest rate, combined with the Consent Fee, represents a significant enhancement from the current 7% coupon.

“Accord continues to execute our growth plan, delivering much-needed capital to small and medium-sized companies, while maintaining our financial strength,” commented Simon Hitzig, President and Chief Executive Officer, adding “we’re pleased to reflect this performance through enhanced terms for our debenture holders.” The Amendments, in particular the extended maturity date, will provide the Company with continuity of financing with which to continue its growth trajectory.

If approved, the Amendments will be reflected in a supplemental trust indenture between the Company and the Debenture Trustee with the expected effective date of August 15, 2023 (provided that the interest rate increase will be effective as of January 2, 2024, in accordance with the requirements of the TSX). Further particulars relating to the Amendments will be described in the management information circular of the Company relating to the Meeting, which will be available under the Company's profile on SEDAR at www.sedar.com and which will be mailed to Debentureholders.

The Amendments will only be effective if passed by an extraordinary resolution of the holders of at least 66⅔% of the principal amount of the Debentures present in person or by proxy at the Meeting and entitled to vote in respect of the Amendments. The Amendments are also subject to the approval of the TSX.

In the event that the Amendments are not approved by Debentureholders and the TSX, the Debentures will mature on December 31, 2023, and Accord will consider other alternatives to address the maturity of the Debentures. The options may include arranging for alternate debt financing to fund the repayment of principal in cash and/or settling the amount owing on maturity, in whole or in part, through the issuance of Common Shares.

About Accord Financial Corp.

Accord Financial is North America's most dynamic commercial finance company providing fast, versatile financing solutions for companies in transition including factoring, inventory finance, equipment leasing, trade finance and film/media finance. By leveraging our unique combination of financial strength, deep experience and independent thinking, we craft winning financial solutions for small and medium-sized businesses, simply delivered, so our clients can thrive. For 45 years, Accord has helped businesses manage their cash flows and maximize financial opportunities.

Forward-Looking Statements

This news release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the Amendments. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies, including a possibility that the Amendments will not be approved by the Debentureholders. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Accord's periodic filings with Canadian securities regulators. See Accord 's most recent annual information form and most recent management’s discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230623105103/en/

For further information, please visit www.accordfinancial.com or contact:

Irene Eddy
Senior Vice President, Chief Financial Officer
Accord Financial Corp.
602 - 40 Eglinton Avenue East, Toronto, ON M4P 3A2
(416) 961-0304
[email protected]