(Sharecast News) - Trident Royalties announced an agreement with BMO Capital Markets and CIBC on Monday, for a newly-structured $40m revolving credit facility (RCF), with the option to increase its size to $60m through an accordion.
The AIM-traded firm said the facility's primary purpose was to retire the existing $40m secured debt facility provided by Macquarie Bank.
It said the core terms of the newly-established facility included interest rates set at SOFR plus 2.5% to 4.5%, contingent on leverage ratios.
The board said the structure aimed to generate interest savings of up to $1.3m annually if fully used, compared to the current SOFR plus 5.75% rate.
It added that the revolving nature of the facility would afford it flexibility for drawing and repaying funds.
The undrawn portion would be subject to a standby fee ranging from 0.88% to 1.58% per annum, yielding further savings relative to the existing fully drawn term facility.
It carried a three-year term, with an option for a one-year extension.
"The implementation of this new revolving debt facility will reduce our cost of capital, and represents a critical dimension of our broader strategy for Trident," said chief executive officer Adam Davidson.
"This refinancing introduces a flexible lower-cost debt facility, which has the potential to expand to $60m, which greatly increases our ability to deploy capital and support future acquisitions alongside our strong balance sheet.
"We are pleased that both BMO and CIBC, who are leading financiers to the sector, share in our long term vision for building a substantial diversified mining royalty business."
At 1130 GMT, shares in Trident Royalties were up 1.31% at 34.7p.
Reporting by Josh White for Sharecast.com.
Trident Royalties (TRR)