RE:RE:RE:HSBC revolverMaxmoe,
So why are you trying to scare shareholders who would otherwise be buying shares of MND.to or MNDJF in the USA with an issue that is a total RED HERRING? Let's look at the terms of the HSBC revolving credit facility from Page 24 of the Q3 MD&A:
US$40 million revolving credit facility
One July 25, 2017, the Company announced a US$ 40 million senior secured revolving credit facility with HSBC Bank Canada (the “Facility”). The Facility matures on July 24, 2020. Proceeds from the Facility will be used for working capital, capital expenditures, permitted acquisitions and other general corporate purposes.
Amounts drawn on the Facility bear interest at LIBOR plus 3.5%-4.5% per annum or at HSBC’s “base rate” plus 2.5%-3.5%, depending on the Company’s leverage ratio. The undrawn portion of the Facility is subject to a standby fee of 1.0% per annum. The Facility is secured by a first ranking security interest over substantially all of the Company’s assets, excluding the Company’s Australian subsidiaries and its Costerfield mine and subject to permitted liens.
The Facility includes a number of customary positive and negative covenants, including a prohibition on the payment of dividends by the Company without HSBC’s consent.
The facility has the below mentioned financial covenants:
• Interest Coverage Ratio of not less than 3.00:1.00 at all times (consolidated basis, calculated on rolling four-quarter basis);
• Leverage Ratio of not more than 3.00:1.00 at all times;
• Tangible Net Worth of less than 75% of Adjusted Tangible Net Worth and Closing Date + 50% of net income (cumulative) earned after Closing Date; and
• Current Ratio of not less than 1.20:1.00.
On September 26, 2018, the Company obtained a waiver from HSBC for the Tangible Net Worth covenant, noted above, as the Company anticipated it would not be in compliance with it on the balance sheet date. The waiver was granted as at September 30, 2018 only, however the waiver eliminates any possibility of default or acceleration of the facility based on a breach of the Tangible Net Worth covenant as at balance sheet date. As a result of the waiver, the amount outstanding under the Revolver Facility has been classified as a non-current liability as at September 30, 2018.
Costerfield is excluded, so please explain how Mandalay Resources goes BK in Q1 2019?