(Touchstone, 22.Dec.2021) — Touchstone Exploration Inc. (TSX, LSE: TXP) entered into an amended and restated loan agreement with its Trinidad based lender providing for a $10mn increase in the principal balance to $30mn.
Touchstone currently has $15mn of the loan principal balance drawn and anticipates withdrawing the remaining $15mn 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: $30mn
• Principal availability period: Principal may be withdrawn prior to 1 January 2022
• Term: 15 June 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 15 September 2022
• Prepayments: Currently permitted with a 1.0% penalty and a 90-day notice period, no penalties payable after 15 June 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 31 December 2022): Net senior funded debt to EBITDA less than 2.5 times net senior funded debt to book value equity less than 0.7 times debt 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