RE:RE:RE:RE:RE:RE:RE:RE:Risk Canacol will be offside on debt covenantDude, are you an idiot? Are you literate? READ PAGE 15 of the same MD&A)
The Corporation was in compliance with its covenants as at March 31, 2015. On April 24, 2015, the Senior Secured Term Loan was settled for the principal amount outstanding on the settlement date of $176 million and was replaced with a new senior secured term loan for a principal amount of $200 million (the “New Term Loan”). The New Term Loan is due September 30, 2019, with interest payable quarterly and principal repayable in eight equal quarterly instalments starting on December 31, 2017, following an initial grace period. The New Term Loan carries interest at LIBOR plus 4.75% and is secured by all of the material assets of the Corporation. The New Term Loan includes various non-financial covenants relating to future acquisitions, indebtedness, operations, investments, capital expenditures and other standard operating business covenants. The New Term Loan also includes various financial covenants, including a maximum Consolidated Leverage Ratio of 3.50:1.00, a minimum Consolidated Interest Coverage Ratio of 2.50:1.00, a minimum consolidated current assets to consolidated current liabilities ratio of 1.00:1.00 and other standard financial covenants. For the purpose of financial covenants calculation, certain changes were made to the definition of Consolidated Total Debt to exclude non-cash indebtedness and office lease commitments.
Additionally, looking at the Apollo loan (and Apollo is well known for their bankruptcy shenanigans), it is unsecured and subordinate to the term loan, it also pays a fat yield of close to 10% and is floating rate, if I were them I would prefer to get my fat yield rather than risk getting cooked in a canadian (or worse, a Colombian) bankruptcy court.