Toronto, ON June 15, 2023 – Ninepoint Partners LP (“Ninepoint”), one of Canada’s leading alternative investment managers, and Third Eye Capital Corporation (“TEC” or “Third Eye Capital”), whose affiliate, Third Eye Capital Management Inc., is sub-advisor of the Ninepoint-TEC Private Credit Fund and the Ninepoint-TEC Private Credit Fund II (“the Funds”), today announced that Pieridae Energy Limited (“Pieridae”) (TSX:PEA) has successfully refinanced a senior secured non-revolving term loan facility. In conjunction with the refinancing, Pieridae will enter a new loan with Prudential Private Capital, the private capital arm of PGIM, the US$1.3 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU), and Voya Investment Management which manages approximately US$323 billion as of March 31, 2023.
Proceeds from the refinancing will be used to fully repay the current outstanding debt of $185 million to funds managed, sub-advised, or operated by affiliates of Third Eye Capital. The term loan was originally provided to Pieridae in October 2019 and has produced a double-digit internal rate of return for the Funds.
Through this repayment, the Ninepoint-TEC Private Credit Fund and Ninepoint-TEC Private Credit Fund II will receive their respective pro-rata share of collectively $123 million. The repayment to both funds will be made upon closing of the refinancing transaction and will provide significant liquidity to service their cash requirements and will position the Ninepoint-TEC Private Credit Fund II to continue to invest and grow. Since inception in 2010, the Ninepoint-TEC Private Credit strategy has produced an annualized net return of 10.33%.
“The transaction is a prime example of the pivotal role private credit plays in the Canadian economy by helping to support and grow successful businesses that typically don’t have access to traditional lenders, like the Canadian banks,” said Ramesh Kashyap, Managing Director and Head of Ninepoint’s Alternative Income Group. “By focusing on senior secured loans positioned at the top of the capital structure, the Ninepoint-TEC Private Credit strategy has been able to deliver healthy, risk-adjusted returns to our investors all the while helping companies like Pieridae strategically support and scale their businesses.”
Third Eye Capital provided the senior secured term loan to Pieridae to help finance its purchase of Shell Canada Energy’s (“Shell”) midstream and upstream assets in the Southern Alberta Foothills in 2019. The transaction and term loan allowed Pieridae to retain more than 200 jobs for former Shell Canada employees. With the addition of these new employees, Pieridae has become a significant employer in the region with roughly 300 employees and has contributed millions of dollars to the local and Canadian economy. The integration of the Shell assets has enabled Pieridae to become the largest Foothills producer in North America, growing net operating income from $25 million in 2019 to $201 million in 2022.
“The refinancing of Pieridae’s debt today is further evidence of the high quality investments that Third Eye Capital makes, which may be overlooked or underappreciated by others. It not only demonstrates our ability to identify hidden gems and capitalize on market inefficiencies, but also shows how our private credit strategy empowers our borrowers and their own employees, stakeholders, and local economies,” said Arif Bhalwani, Chief Executive Officer at Third Eye Capital.
Third Eye Capital made the $200-million (net) loan to Pieridae in 2019 through Erikson National Energy Inc. (“Erikson”), a special purpose entity partially financially backed by Ninepoint-TEC Private Credit Fund and the Ninepoint-TEC Private Credit Fund II. Through to today, Erikson has received $370 million in cash payments, comprising principal, interest and fees from the loan. Erikson will retain a $20 million short-term, senior secured loan at Pieridae Energy’s parent company, and it currently owns about 15% of Pieridae Energy’s common stock.
About Ninepoint Partners
Based in Toronto, Ninepoint Partners LP is one of Canada’s leading alternative investment management firms overseeing approximately $8 billion in assets under management and institutional contracts. Committed to helping investors explore innovative investment solutions that have the potential to enhance returns and manage portfolio risk, Ninepoint offers a diverse set of alternative strategies spanning Equities, Fixed Income, Alternative Income, Real Assets, F/X and Digital Assets. Ninepoint Digital Asset Group is a division of Ninepoint.
About Third Eye Capital
Founded in 2005, Third Eye Capital is Canada’s leading provider of asset-based financing solutions to companies that are underserved or overlooked by traditional sources of capital. With a proven track record of nearly $5 billion in lending commitments across more than 125 portfolio investments, Third Eye Capital is one of the most experienced private debt firms in Canada. From navigating through periods of extreme distress to embracing moments of extraordinary change, Third Eye Capital excels at executing opportunities that other lenders simply cannot or will not pursue. Third Eye Capital actively engages with a company’s key assets to bridge the gap between their perceived value and actual worth, and provides access to capital and expertise that enables portfolio companies to flourish.
Scott Deveau/Kate Sylvester
Longacre Square Partners