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  • Writer's pictureThe San Juan Daily Star

PRIDCO signs loan to expand CooperVision facility

The CooperVision manufacturing plant in Juana Díaz

By The Star Staff

The Puerto Rico Industrial Development Company (PRIDCO) and FirstBank, in a strategic partnership, have signed a $52 million credit agreement to add 196,000 square feet to the structure PRIDCO leases to contact lens maker CooperVision.

PRIDCO established the Puerto Rico Industrial Investment Corporation (PRIICO) as a conduit to borrow funds to construct highly customized facilities requiring significant capital investment to attract high-caliber tenants to Puerto Rico, according to a letter published by the Financial Oversight and Management Board last week.

PRIDCO would grant a mortgage on the existing manufacturing facility and the project to FirstBank, as an administrative agent, as security for PRIICO’s loan.

PRIDCO is the owner and landlord of the manufacturing facility occupied by CooperVision, which will serve as collateral for the proposed debt transaction.

CooperVision’s parent company, The Cooper Companies Inc., will guarantee CooperVision’s obligations to PRIDCO under CooperVision’s lease with the public corporation.

The principal amount and interest of the proposed debt transaction will be repaid from monthly rent payments under the 15-year lease agreement by and between PRIDCO and CooperVision.

Rental income received from CooperVision under the lease agreement must be sufficient to cover debt service of the proposed debt transaction, with a debt service coverage ratio of 1:1. The monthly rental payments will be deposited in a designated blocked and pledged account to be maintained by FirstBank. The proposed debt transaction provides for a fixed interest rate equal to the 10-year secured overnight financing rate, or SOFR, swap rate plus 4.10%. The interest rate is subject to market conditions and will be determined on the closing date.

Under the proposed debt transaction, PRIDCO will retain ownership of the asset and lease the new space to CooperVision to expand its manufacturing presence that was first established in 1985, and that has been operating at the current Juana Díaz facilities since 1999. The project will be completed in multiple phases with an estimated construction cost of some $76 million and total expansion cost estimated at around $104 million. The project entails the creation of some 725 new jobs, with an incremental annual payroll estimated at $32 million.

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