Arcata Board Amends Loan Agreement With Wing Inflatables – Times-Standard

Years after the city of Arcata granted a loan to Arcata-based Wing Inflatables Inc. to help grow the business, the city council unanimously decided by a 4-0 vote of modify the loan agreement of both parties.

The 2016 loan of approximately $ 2.5 million was made to Wing to support a city’s economic development goal of generating more, as described by the city, “low to moderate” income jobs. The company currently employs around 120 local workers.

Last September, the company landed the largest contract in its history for the purchase of 904 improved combat rubber reconnaissance boats for $ 31,921,100 from the US Department of Defense. The award would bring 45 additional positions to the company’s head office, Arcata.

As outlined in the agenda for Thursday night’s special meeting, the move comes after the company sought the city’s consent to an increase in senior amortized debt, a corresponding repayment of subordinated debt at interest. only and increased primary lender excess cash flow.

“This would put Wing in a much stronger financial position over time, ensuring that the company is able to continue providing the jobs and services it does in the city of Arcata,” said David Loya, responsible for community development of Arcata.

The move, supported by the city’s loan advisory committee, allows the city’s business assistance loan to Wing Inflatables to be subordinated to refinanced debt and is supposed to better secure the city’s loan.

Loya said the changes are not expected to negatively impact the company’s financial position.

“The restructuring is not really having an impact on their cash flow, but it is shifting from what is now a high interest rate loan, with one interest payment, to a low rate term loan. interest, so paying off the principal on that puts them in a better position overall, ”he explained.

The Town’s business assistance loan balance is currently $ 1,988,808 with a fixed rate of 3%. Loya said the loan payments were made on time.

Wing President and CEO Andrew Branagh said as her business has grown it has also become more bankable, meaning that the big banks are more willing to lend. higher at lower interest rates, which leads to the conclusion of such agreements.

With the changes in senior debt and interest rates, Branagh says the company feels compelled to keep the city in the know.

“When we approach one of our senior debt securities where the higher interest rate changes interest rates, we must, out of courtesy and relevance, keep the city informed of how we change our loan. first, because we see them as a partner, ”he said.

Branagh added that he appreciates local support at all levels.

“We appreciate the community and the support,” he said. “We are delighted to continue to invest in the community and we love that this kind of center of excellence for inflatable technology has been established in Arcata.”

Mario Cortez can be reached at 707-441-0526.

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