Trident Royalties PLC on Wednesday said it has committed to a new $40 million revolving credit facility with an option to increase the financing to $60 million through an accordion feature.
The mining royalty company said the three-year facility with a one-year extension option has an interest coupon of the secured overnight financing rate plus 2.5%-4.5% depending on leverage ratios, resulting in interest savings of up to $1.3 million annually if fully drawn, relative to current SOFR plus 5.75% rate.
The lenders are BMO Capital Markets and CIBC, while the proceeds will be applied to retire the existing $40 million secured debt facility provided by Macquarie Bank Ltd.
Trident Royalties said closing and drawdown of the RCF are expected early in the first quarter of 2024.
‘This refinancing marks a key step in Trident’s evolution, as we develop our capital structure by introducing a flexible lower-cost debt facility which has the potential to expand to support future acquisitions. Lowering our cost of capital directly improves our competitiveness, increasing our ability to deploy capital to drive value accretive growth,’ said Trident Royalties Chief Executive Officer Adam Davidson.
‘We are delighted to have the support of both BMO and CIBC, who are leading financiers to the sector and share our long-term vision for building a substantial diversified mining royalty business.’
Shares in Trident Royalties were up 1.7% to 32.02 pence each in London on Wednesday afternoon.
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