HEXO stock is making headway today after HEXO Corp (TSX:HEXO) (NYSE:HEXO) enters into a $65 million CAD bank debt facility with the Canadian Imperial Bank of Commerce, otherwise known as CIBC.
Let's dig into this momentous deal.
HEXO Secures $65 Million in Bank Debt Facility
This morning, HEXO Corp released news that it has entered into a $65 million CAD bank debt facility with CIBC. The bank is offering the company a rate of interest that is expected to average 5% over its three-year term.
HEXO is primarily going to use these funds to expand its Gatineau, Quebec facility. The cannabis company will also be making improvements to its newly leased facility in Ontario. The remainder of the loan will be used for general corporate purposes and working capital within the cannabis company.
The current credit facility is made up of a $50 million CAD term loan and a $15 million CAD revolving loan. The loans will mature in 2022. Additionally, the facility may increase to $135 million CAD, so long as certain legal and business conditions are met.
HEXO Stock Today
According to Yahoo Finance, HEXO is currently trading at $5.62 a share, up +$0.04 (+0.66%). On the TSX, HEXO is trading at $7.46 a share, up +$0.07 (+0.95%). The company's latest news has pushed its shares up higher this morning and has the potential to carry the stock up throughout the week. It all depends if investors feel positive about the company's debt financing expansion route.
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In the last five days, HEXO stock is trading up almost 10% on both the TSX and NYSE.
HEXO Corp recently began trading on the NYSE and has made quite a splash in 2019. The company began trading on the TSX in mid-2017. Year-to-date, the cannabis stock is up over 50% on the TSX and up 8% on the NYSE since its debut.
Is HEXO's debt facility enough to cause excitement among investors? What do you think?
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