Trident Royalties PLC (AIM:TRR, OTCQX:TDTRF) said it will cut its borrowing costs by up to US$1.3 million a year through a new US$40 million revolving credit facility.
A commitment letter has been signed with BMO Capital Markets (NYSE:BMO) and CIBC for the new loan, which includes a US$20 million accordion option, that will replace the US$40 million provided by Macquarie Bank.
Interest on the new facility is SOFR plus 2.5-4.5% (depending on leverage ratios), resulting in interest savings of up to US$1.3 million per annum if fully drawn, relative to the current SOFR plus 5.75% rate.
Standby fees for undrawn parts of the facility will also be lower, said Trident, with the new deal running for three years with a one-year extension option.
Closure and drawdown is expected in early 2024.
Net debt currently stands at approximately US$21 million, post-completion of the Antler acquisition.
Adam Davidson, Trident’s chief executive commented: "This refinancing marks a key step in Trident's evolution, as we develop our capital structure by introducing a flexible lower-cost debt facility which has the potential to expand to support future acquisitions.
“Lowering our cost of capital directly improves our competitiveness, increasing our ability to deploy capital to drive value accretive growth.“