Touchstone Exploration Inc. (TSX, LSE: TXP) has announced today that it has entered into an amended and restated loan agreement with its Trinidad based lender providing for a $10 million increase in the principal balance to $30 million (the “Amended Loan Agreement”).
Touchstone currently has $15 million of the loan principal balance drawn and anticipates withdrawing the remaining $15 million available balance prior to the end of 2021. The Amended Loan Agreement provides enhanced financial flexibility at attractive after tax pricing.
The Amended Loan Agreement did not alter any material terms of the Company’s prior loan agreement, save for an additional underwriting fee of $50,000 payable to the lender, equivalent to 0.5% of the increased principal amount. The following material terms and conditions of the original loan agreement remain applicable:
| · Borrower | Touchstone Exploration (Trinidad) Ltd. |
| · Facility type | Senior secured syndicated loan, with Republic Bank Limited acting as initial lender, arranger and administrative agent |
| · Revised facility amount | US$30 million |
| · Principal availability period | Principal may be withdrawn prior to January 1, 2022 |
| · Term | June 15, 2027 – seven years from the initial closing date |
| · Fixed interest rate | 7.85% per annum, payable quarterly in arrears |
| · Principal amortization schedule | Twenty equal and consecutive quarterly principal repayments commencing on September 15, 2022 |
| · Prepayments | Currently permitted with a 1.0% penalty and a 90-day notice period, no penalties payable after June 15, 2023 |
| · Collateral | Senior mortgage over fixed assets of the Borrower and its subsidiaries and a corporate guarantee from Touchstone Exploration Inc. |
| · Financial covenants (to be initially tested for the year ended December 31, 2022) | Net Senior Funded Debt to EBITDA less than 2.5 timesNet Senior Funded Debt to Book Value Equity less than 0.7 timesDebt Service Coverage Ratio greater than 2.5 times |
| · Cash reserve balance | Maintain a balance of not less than the equivalent of two quarterly interest payments due |
