RE:How does this Gold Trust Account work for the 2024 Notes?internalaudit wrote: The Notes bear interest at 8.25% per annum, to be paid monthly, and have a six-year term. The Company is required to set aside an amount of physical gold each month in a trust account (the “Gold Trust Account”) and the proceeds from the quarterly sale of the gold will be used to repay the principal amount of the Notes based on a guaranteed floor price of $1,250 per ounce. The scheduled annual number of physical gold ounces to be deposited into the Gold Trust Account will vary by year, representing approximately 10% of the projected annual gold production from the Company’s Segovia Operations and ranging from 15,594 ounces in the first year down to 10,000 ounces in the final year of the term of the Notes.
Does this mean the company sets aside gold monthly, sells the ccumulated gold quarterly and partially pay down the Notes quarterly? The 2024 Notes are non-calleable for the first three years though.
duh!
https://s21.q4cdn.com/834539576/files/FAQ/GCM-Gold-Linked-Notes-Debentures-FAQ-2018-04-30.pdf
Each quarter ending January 31, April 30, July 31 and October 31, the Company will amortize the principal amount of the Notes by selling the physical gold in the Gold Trust Account. The amount of the quarterly payments to Holders will be determined by reference to the London P.M. gold fix on the 15th day of January, April, July and October, as applicable, subject to a guaranteed floor price of US$1,250 per ounce (the “Floor Price”). The amount of the principal reduction (the “Amortization Payment”) each quarter will be based on the number of gold ounces and the Floor Price. The excess amount of the London P.M. gold fix per ounce over the Floor Price (the Gold Premium”) will be paid to holders as additional premium and will not be applied to amortization of the principal amount of the Notes. Total quarterly payments to Holders will represent the sum of the Amortization Payment and the Gold Premium.
Each Amortization Payment will reduce the aggregate number of Notes outstanding (in $1 increments with any necessary rounding as reasonably determined by the Issuer). For certainty, the quarterly Amortization Payments will not result in a decrease in the principal amount of each $1 increment of Notes, but will instead result in the decrease of the total number of Notes outstanding.