Touchstone Exploration Inc (LON:TXP) (TSE:TXP) told investors it has entered into escrow for a US$20mln seven-year loan with Trinidad and Tobago’s Republic Bank Limited.
The loan will carry interest of 7.85%, payable quarterly in arrears, and is secured against the company’s assets and subsidiaries.
READ: Touchstone inks agreement for Ortoire gas sales
"We are pleased to be able to source local financing from Republic Bank, the largest lender in Trinidad and the Caribbean,” said Scott Budau, Touchstone chief financial officer in a statement.
“The financial flexibility of the new facility will us allow to confidently proceed with our Ortoire exploration activities. In addition, the interest payable on the loan is expected to be tax-deductible in Trinidad, equating to an after-tax cost of capital of 3.5%. We would also like to give our sincere thanks to Crown Capital, which has supported us since 2012," he added.
The company noted that it continues to operate under an existing C$20mln credit facility, which includes a production payment to the lender (equal to 1.33% of petroleum sales) through to October 2021.
Meanwhile, it has agreed it will continue the obligation under the previous terms and conditions. The company added that the total payout of the existing credit facility will include the C$20mln principal balance, all accrued interest thereon, and a 1.0% prepayment fee.
