RE:Dept restructuringI cannot believe there are no other covenants, but they sure didn't disclose any others yet. TD Bank kept the term on the shorter-end of things too with a 3 year balloon. TD Bank can renegotiate then if they need to. The leverage ratio is a good one that will catch most issues. Usually there is a defined range that dictates interest rates, but also a cap to how much leverage the bank will allow. I'm assuming they haven't disclosed every covenant or condition yet. The accordian line feels like it might be specific to an accretive acquisition, but no other information was provided. That accordian line doesn't feel big enough for a traditional acquisition. Maybe it's more in line with an upfront royalty payment to be able to represent and sell someone else's drug.
Nothing in here giving me warm and fuzzy's about TH-1902, but the fact they were able to refinance at better terms gives reason to cheer that the future projections must be reasonably solid. It's a shame they had to pay a pre-payment penalty, warrants, and fees, because of past mistakes, only to dilute any way before being back in a position to have a reasonable loan.
I wonder if that $5MM draw on the line is because they used cash to pay the difference owed to Marathon and will utilize a sweep to ensure the line of credit stays paid down net of cash?
Trogarzon wrote: Can't find anything wrong with it.... seems non dilutive... more flexibility... freeing up 20M....nothing on covennants but might remove this sword above their head and ours.