RE:Cash Sweep?For the two-quarter period ended December 31, 2022, excess cash flow, as defined in the second lien secured notes indenture agreement, was $43.4 million. At the interest payment date in April 2023, the Corporation will be required to redeem, at par, total second lien secured notes up to an amount equal to 50% of excess cash flow, or $21.7 million, subject to minimum liquidity of $75.0 million as defined in the indenture agreement being maintained before and after such payment is made. As such, the $80.4 million of cash used to repurchase second lien secured notes and junior notes during the six months ended December 31, 2022 and any outstanding amounts drawn on the syndicated revolving-term credit facility as at the interest payment date in April 2023 will be taken into account when calculating the minimum liquidity amount.
“Liquidity Amount” means, at any time, the result of (A – B) + C where A is the amount of all unrestricted cash, cash equivalents and short-term investments, all determined in accordance with IFRS, and held by the Company and the Restricted Subsidiaries in bank accounts (including securities accounts) located in any province or territory of Canada, B is the principal amount drawn under the Credit Facility at such time (excluding, for greater certainty, the amount of any letters of credit issued thereunder) and C is the aggregate amount spent by the Company or its Affiliates on all repurchases of Notes and Junior Notes pursuant to any tender offers, open market purchases, negotiated transactions or otherwise pursuant to Section 3.10 of this Indenture or Section 3.08 of the Junior Notes Indenture (or any successor provisions thereto), as applicable, during the relevant two fiscal quarter period in respect of which the Liquidity Amount is being calculated.
They are managing their cash in Canadian banks to avoid the sweep.