(Trinidad Guardian) ANSA McAL says the $765 million loan, which it raised earlier this month, is going to be used for several reasons, all of which are in pursuit of its goal to double the size, scale, returns and impact of the group by 2027, an ANSA McAL spokesperson said on Friday.
In a notice posted on the website of the T&T Stock Exchange last week Friday, ANSA McAL announced that it had executed a loan agreement on September 10, for a dual-tranche, fixed and floating rate, senior secured, syndicated term loan for the maximum amount of $765 million, which is to be allocated for general corporate purposes.
Senior secured means that the loan has priority over all other debt of the Company and is secured by specific assets or collateral, in this case a debenture.
A debenture is a type of debt instrument that is unsecured by collateral, relying instead on the creditworthiness and reputation of the issuer for support, according to a definition from Investopedia.
The $765 million loan is secured by a debenture over fixed and floating charge over assets of the ANSA McAL Ltd.
The loan was arranged by Citibank (Trinidad & Tobago) Ltd with commitments from 20 lenders (the syndication).
The spokesperson explained that the term of the loan is five years with the fixed interest rate tranche being 5.73 per cent while the floating interest rate tranche is based on 90-day treasury bills offered or three-month TT dollar deposits plus 300 basis points.
The group said tranche A (floating rate) was disbursed in the sum of $378.8 million, with tranche B (fixed rate) being disbursed in the sum of $386.2 million.
The covenants are the typical and customary covenants for a loan of this size and credit-worthy borrower, the group said.
The group raised the funds without having to procure a credit rating. The loan is repayable in accordance with an amortisation schedule.
Responding to the suggestion that sometimes “general corporate purposes” means the money is being raised for an acquisition, the spokesperson said, “The money is being raised for mixed purposes in service of our 2X Strategic Plan growth projects.”