Business
Connacher announces arrangement of revolving credit facility
Connacher announces arrangement of revolving credit facility
About this update from Medexus Pharmaceuticals Inc.
[{"type":"text","content":"\n\n\n\nNov. 25, 2009 (Canada NewsWire Group) -- CALGARY, Nov. 25 /CNW/ -- Connacher Oil and Gas Limited (CLL - TSX) announces that it has closed its previously announced US$50 million revolving credit facility (\"facility\"). The two year facility will be available for general corporate purposes and is being provided by a syndicate of Canadian and international banks. In conjunction with the closing of this new facility, Connacher cancelled an outstanding cash-collateralized letter of credit facility. Related cash in the amount of $10 million will accordingly be moved from a previously-restricted category on the company's balance sheet and will also be available for general corporate purposes.The new US$50 million credit facility will provide Connacher with additional liquidity and financial flexibility. It will facilitate the issuance of letters of credit and the conduct of hedging activities. The facility is secured by a first priority security interest in all of the present and after- acquired assets of Connacher, except Connacher's holdings of Petrolifera Petroleum Limited shares and the assets of Great Divide Pipeline Corporation, which is presently an inactive subsidiary. The facility ranks senior to Connacher's outstanding long term indebtedness, as was contemplated when Connacher issued its first lien secured notes earlier in 2009. The facility also has certain financial covenants, as is customary for this type of credit. The financial covenants, which must be met on a fiscal quarterly basis, are:1) The ratio of the sum of cash, the undrawn amount of the new creditfacility and EBITDA to cash interest payable on the debt of thecompany, excluding the company's outstanding convertible debentures,shall not be less than 1.5:1 calculated on a rolling four fiscalquarterly basis;2) Excluding the company's outstanding convertible debentures fromconsolidated total debt, consolidated total debt to totalcapitalization shall not be greater than 70 percent, dropping to 65percent when production from Algar exceeds 8,000 bbl/d for a periodof 30 consecutive days; and3) Debt outstanding under the new credit facility to EBITDA shall not begreater than 2.0:1.In the opinion of Connacher, the provision of this facility in the current economic and credit environment underscores the confidence held by both the lending institutions and by Conna...