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Formation Metals Inc. (TSX:FCO) announced today that it has secured a Letter of Credit in support of US$43.6 million of the US$77.7 million in proceeds the Company previously raised from the sale of Federal Stimulus Program Recovery Zone Facility Bonds.
As quoted in the press release:
As quoted in the press release:
The Letter of Credit, provided by BMO Bank of Montreal, was secured with the Company’s cash on hand. The balance of US$34.1 million from the initial US$77.7 million in Bonds remains in trust. This preserves 100% of the Bond debt financing. In the longer term, in lieu of cash security, the Company intends to use the Idaho Cobalt Project to secure a letter of credit for the full US$77.7 million.
Formation Metals Inc., CEO, Mari-Ann Green, said:
“This is not bank debt – this is bond debt.Therefore, including the interest on the letter of credit, the debt carries a floating interest rate which is currently less than 60 basis points. The bonds mature in 28 years and there is no obligation to repay the principal until maturity. In addition, they can be redeemed by the Company at par at any time.”
Click here to read the Formation Metals Inc (TSX:FCO) press release
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