RE:RE:RE:RE:So if I read correctly the notes will be gone in 8 years?Method wrote: esviagra wrote:
There's no bonus per se for price over $1250. The debt just amortize faster - you get paid back faster and not getting paid extra. They remove the clause where the company gets to retain the excess if gold is over $1400 - I guess the debt holder really wants to ensure the money goes toward paying down debt.
This is from the term sheet:
The Company will provide the investor with an amount of gold each year (stored in escrow monthly) in a trust account (the “Gold Trust Account”). The value of the gold in the Gold Trust Account shall be used to amortize the Notes on a quarterly basis. At any price between the Floor Price and the Cap Price, the Notes will be amortized at a premium to par, so the outstanding principal balance of the Notes will decline according to the schedule below regardless of the spot price of gold (with the difference being received by the investor as a premium).
Like you said they removed the Cap price but they kept the floor price. Do you agree with my interpretation?
You are correct. This term is actually quite horrible for the company. I contacted them about participating in the private placement and told it is for accredited investor only.
I guess they really really hate the dilution.