08:01 AM EST, 01/04/2023 (MT Newswires) -- Vicinity Motor Corp. (NASDAQ:VEV and TSXV:VMC) on Wednesday said it has secured US$30 million in credit commitments from Royal Bank of Canada (NYSE and TSX: RY) and Export Development Canada, pushing its shares almost 8% higher in U.S. pre-market trading.
The North American supplier of commercial electric vehicles said the credit commitment will fund production of the company's VMC 1200 class 3 electric truck. It can be used for up to 100% of eligible production costs on the vehicle, excluding labor and overhead from Vicinity's assembly plants, the company said.
Vicinity said the interest rate on this new facility will be prime plus 2% and will be secured by existing assets of the company. In addition to this credit commitment, RBC will continue to provide Vicinity with C$10 million in an asset-backed loan for use with its existing bus orders and a US$3 million letter of credit facility.
William Trainer, Founder and CEO of Vicinity, said the credit commitment provides the company with the working capital necessary to monetize its 1,100-unit order backlog. The commitment is in the final stages of documentation and due diligence and expected to be in place by February, the company said.