“Basically, in our current utilization and the way the cost structure is, it makes more sense to us to be at $65 million than at $100 million,” Van Orman said. “It is something [Wells Fargo and Rifco] discussed, and in our case, we are also managing the cost of borrowing, so if there’s an area that we aren’t using, then we don’t want to pay for it.”
Rifco’s year-over-year originations dropped 12.2% to $25.8 million as of June 30. The Red Deer, Alberta-based lender had $45.6 million outstanding on its credit line at midyear.
Despite the credit line reduction, the Wells Fargo-led banking syndicate extended the facility by one year, to Feb. 17, 2020.
The funding facility is Rifco’s smallest since the company started to receive funding from Wells Fargo in November 2012. The credit facility started at $70 million but continued to grow with each maturity extension. The bank line, which was syndicated to include ATB Corporate Financial Services in 2013, increased to a $100 million line of credit in 2016.
However, the syndicate’s funding — regardless of size — is a positive sign for Rifco, Van Orman said. “Getting a renewal is a vote of confidence,” he said.
Additionally, Rifco has three securitization facilities totaling $127.5 million. The facilities are backed by Securcor Trust, Mountain View Credit Union, and Canadian Schedule I chartered bank.