Capstone Mining gets $440 million of four-year revolving commitments

By Susanna Moon

Chicago, Jan. 16 – Capstone Mining Corp. said it obtained an amended four-year senior secured corporate revolving credit facility for up to $500 million, which consists of $440 million commitments plus a $60 million accordion.

Scotiabank is the co-lead arranger, joint bookrunner and administrative agent, and Canadian Imperial Bank of Commerce is the co-lead arranger, joint bookrunner and syndication agent. Other syndicate lenders include Citibank, NA, Canadian Branch; Wells Fargo Bank NA, Canadian Branch; Export Development Canada; Bank of Montreal; Mizuho Bank, Ltd.; and ING Capital LLC.

The facility amends Capstone’s senior secured corporate revolving term facility and allows for the repayment and cancellation of its senior secured reducing revolving credit facility, according to a company press release.

The four-year facility matures in January 2019 with extension rights.

Interest on the loans is Libor plus 300 basis points and a standby fee of 0.675%, payable on the undrawn balance of the facility.

The $60 million accordion may be exercised with lender commitments.

“This low-cost credit facility, combined with our existing cash balance and cash flow from operations, offers Capstone significant financial flexibility to meet our operating requirements and to address potential market or operational disruptions, including periods of low copper prices,” Darren Pylot, president and chief executive officer of Capstone, said in the press release.

“We expect to draw approximately $265 million once the standard conditions precedents are met. This will replace our current borrowings and will eliminate our requirement for amortization, leaving us with approximately $235 million of additional credit capacity. At the same time, we maintain the option to access the high yield bond market when conditions improve if that is still appropriate for Capstone at the time.”

Capstone is a Vancouver, B.C.-based copper mining company.

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