Daily News: February 25, 2019

Pan American Amends Credit Facility, Acquires Tahoe Resources

Pan American Silver increased its revolving credit facility by $200 million to $500 million. The facility was led by The Bank of Nova Scotia and the Canadian Imperial Bank of Commerce as joint lead arrangers and joint bookrunners.

The facility will mature on February 1, 2023. At Pan American’s option, amounts can be drawn under the revolver and will incur interest based on the company’s leverage ratio at either LIBOR plus 1.875% to 2.750% or The Bank of Nova Scotia’s base rate on U.S. dollar denominated commercial loans plus 0.875% to 1.750%. Undrawn amounts under the revoler are subject to a stand-by fee of 0.4219% to 0.6188% per annum, dependent on the company’s leverage ratio.

Concurrent with the facility amendment, Pan American Silver completed its previously announced acquisition of all of the issued and outstanding shares of Tahoe Resources.

Michael Steinmann, president and CEO of Pan American, said, “The completion of the arrangement establishes the world’s premier silver mining company with an industry-leading portfolio of assets, a robust growth profile and attractive operating margins. We are also now the largest publicly traded silver mining company by free float, offering silver mining investors enhanced scale and liquidity.”

In aggregate, Pan American will pay $275 million in cash and issue 55,990,512 Pan American shares and 313,887,490 CVRs to Tahoe shareholders under the arrangement. At close, existing Pan American and former Tahoe shareholders will own approximately 73% and 27% of Pan American, respectively.

Pan American drew down $301 million under its amended revolver under LIBOR-based interest rates to fund, in part, the cash purchase price under the arrangement and to repay, in full, and cancel Tahoe’s second amended and restated revolving facility, under which $125 million had been drawn.

The shares of Tahoe are expected to be delisted from the Toronto Stock Exchange as of the closing of the market on February 26, 2019 and on the New York Stock Exchange effective as of the closing of the market on March 4, 2019, subject to the approval of each exchange.