VISTA, Calif. -- Eco Building Products, Inc. (OTCBB: ECOB) announced today it has been supplied a one hundred million ($100,000,000.00) dollar standby letter of credit to support major expansion in the Company's core business. InsurFinancial Holdings, Plc has negotiated the credit facility in what they believe is recognition of the expanding worldwide demand for the "ECO" branded products. This facility is provided by the Bank of China from the private client division of its Beijing, China offices. The Bank of China is rated A-1, by Standard and Poor's, and is one of the top banks in the world. Under the terms, this facility credit support will not expire until 4th of December 2016.
Additionally, the agreement grants an option that allows InsurFinancial Holdings, Plc to convert their fee into an equity investment of up to five million ($5,000.000.00) dollars each year for the next four years. The option calls for the share price of the additional equity investment to be calculated at 120% of the three month trailing average of ECOB's stock. The Company now has the availability of credit which should enhance credit support for the future liabilities incurred in the rapid expansion of the demand for its products.
"After identifying the need of the industry and several years of creating our Eco Red Shield ™ coatings along with the Eco branding of coated lumber products the Company now has the potential financial support to expand its products to the world market. With the recent achievement of Eco Red Shield building code approval coupled with our stand by letter of credit we now have the foundation to compete head to head with the treated lumber industry, a multi-billion dollar market place. We have built a strategic infrastructure with eight approved manufacturing sites allowing us to rapidly capture this multi-billion dollar a year lumber market in the USA and abroad," stated Steve Conboy, President and CEO of Eco Building Products. "I have over thirty years of experience in the construction and building products industry with execution being my biggest strength. Industry supply chain has changed due to the past several years of housing decline. ECOB is retooled and ready to explode into the recovering housing market with our value added protection the industry needs just in time for this election year," added Conboy.
About the Stand by Letter of Credit (SBLC)
InsurFinancial, under contract, arranged the SBLC to improve the credit worthiness of the Company. In the event ECOB's liabilities from the expansion cannot be met from ordinary course of business the Company can request its bank to draw down on the credit facility to cover liabilities. ECOB has been advised that the SBLC has been secured with blocked funds deposited in the Bank of China. Though, not yet exercised, the Bank of China will honor the liabilities up to one hundred million dollars.
About Eco Building Products, Inc.
Eco Building Products, Inc. is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against fire, mold/mycotoxins, fungus, rot-decay, wood ingesting insects and termites with ECOB WoodSurfaceFilm™ and FRC™ technology (Fire Retardant Coating). Eco Building products, "Eco Red Shield", "Eco Blue Shield" & "Eco Clear Shield" utilizing patent pending technology is the ultimate in wood protection, preservation, and fire safety to building components constructed of wood; from joists, beams and paneling, to floors and ceilings.