Corporate Debt Facility
The outstanding principal amount under Keybridge's corporate debt facility, as at today's date, is USD41.5 million. With existing investment inflows from the Company's remaining portfolio, the outstanding principal is expected to be reduced to approximately USD40m by June 2012, the current maturity date of the facility.
Keybridge has now accepted terms offered by the Company's banks to extend the maturity date of this facility from June 2012 to June 2013. Key terms for the extension are outlined in Attachment 1. In summary, they are as follows, and become effective as from 23 March 2012:
- Minimum principal repayments of USD16.5m are required between now and 31 December 2012 so as to reduce the principal outstanding to USD25m by that date.
- The borrowing margin will be increased to 5.50% per annum.
- An additional fee of 1.50% per annum will be charged on the facility on top of the margin. This fee will be eliminated in full if the Company achieves the above repayment milestones by 31 December 2012. Additionally, if the Company achieves these repayment milestones, the borrowing margin will reduce from 5.50% per annum to 5.00% per annum post achievement of the repayments milestone.
It is anticipated that documentation for the new facility terms should be completed shortly. Keybridge is confident of its ability to meet these required terms.
Cashflow
Keybridge currently has approximately $3.6 million of cash-on-hand. For the remainder of this financial year, the Company continues to expect to achieve a break even operating cashflow position. That is, the Company's fixed commitments of interest and operating costs are expected to be met from operating income received (subject to the underlying obligors underpinning the income generated continuing to meet their contractual commitments).
Going forward, as the Company seeks to best realise assets or to refinance its debt to achieve the required milestone payments, it is possible that such realisations will be delivered from selling cashflow generating assets, thereby putting the Company's present break even operating cashflow position at some risk. This possible cost in short term cashflow will however be incurred for the tangible benefit of further reducing the Company's debt position, leading to the increased feasibility of Keybridge being in a position to consider its new investment and regrowth strategy in the near future.
Attachment 1
Key Debt Terms
| Currency |
The facility is to remain denominated in US Dollars. |
| New Maturity Date |
3 June 2013. |
| Effective Date |
These new terms will be effective as from 23 March 2012. |
| Cash Sweep |
To be maintained as per current arrangements, with all surplus cashflow in excess of agreed minimum working capital retention amounts being used to make principal repayments to the banks. |
| Review Event |
Minimum principal milestone repayments are required in the period from 28 February 2012 to 31 December 2012 to reduce the principal outstanding to USD25 million. |
| Margin |
The margin above LIBOR will be amended from a current 3.75% pa to 5.50% pa. This margin will reduce to 5.00% pa provided the Company achieves the minimum milestone repayments by the required date. |
| Additional Fee |
In addition to the Margin, the banks require an establishment fee of 0.5% of the facility amount, and from the Effective Date, there will be an additional fee accruing under the facility equal to 1.50% pa. This latter fee will however be waived in full if the debt repayment milestone in the period to 31 December 2012 is achieved. |
Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping, finance receivables and infrastructure.
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