Ero Copper refinanced all of its current U.S. dollar denominated senior secured debt via a new $130 million debt financing, comprised of an $80 million senior secured amortizing non-revolving credit facility and a $50 million senior secured revolving term credit facility, with The Bank of Nova Scotia and Bank of Montreal.
Scotiabank acted as joint lead arranger, sole bookrunner and administrative agent and BMO acted as joint lead arranger and syndication agent.
The facilities will be used to refinance approximately $119 million of the company’s existing held debt, including the previous $50 million senior secured non-revolving credit facility with Scotiabank.
The new facilities will significantly reduce principal payment obligations in years 2019 and 2020 under its existing debt, improving Ero Copper’s working capital position, as well as reduce the company’s cost of borrowing compared to its existing debt. The revolver will also provide enhanced operational and financial flexibility going forward.
The term facility features a 5-year term with principal payments beginning 2 years after closing and with equal quarterly installments thereafter, while the revolver is payable in a bullet at maturity, 4 years from closing.
The facilities will bear interest on a sliding scale at a rate of LIBOR plus 2.75% to 4.75%, depending on Ero Copper’s consolidated leverage ratio at the time. Commitment fees for the undrawn portion of the revolver will also be on a sliding scale between 0.69% to 1.19%.
The facilities include standard and customary terms and conditions with respect to fees, representations, warranties and financial covenants.
Headquartered in Vancouver, British Columbia, Ero Copper is focused on copper production growth from the Vale do Curaçá Property, located in Bahia, Brazil. The company owns a 99.6% interest in the Brazilian copper mining company, MCSA, the owner of the Vale do Curaçá Property with over 39 years of operating history in the region.