STM Group Plc (LON:STM), the cross-border financial services provider, is pleased to announce that it has this week signed a credit facility with Royal Bank of Scotland (International) Limited, as first notified on 13 August 2020 when credit terms were agreed in principle by the bank, to support its M&A growth strategy.
The credit facility is for £5.5m, is to be used purely for acquisitions, and is expected to be drawn down in line with acquisition milestones by 22 April 2022 at the latest.
The Facility has a 5 year term with capital repayments structured over ten years and a final instalment to settle the outstanding balance in full at the end of the 5 years. Interest on the drawn funds will be charged at 3.5% per annum over the Sterling Relevant Reference Rate, with the undrawn balance charged at an interest rate of 1.75% per annum over the Sterling Relevant Reference Rate.
STM Group state the Facility is subject to customary cashflow to debt service liability ratio and EBITDA to debt service liability ratio covenants tested quarterly and is secured by a capital guarantee provided by a number of non-regulated holding subsidiary companies within the Group and a debenture over these companies.