Note 7 - Loan Payable |
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Debt Disclosure [Text Block] |
7. Loan Payable:
Amended 2019 Credit Facility
On
June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald), LLC entered into an Amended and Restated Senior Secured Credit Agreement with Royal Bank of Canada (“RBC”), as administrative agent, and lenders party thereto (collectively with RBC, the “Lenders”) under which the Company has access to an aggregate of up to
$240 million in funds, which consists of
$180 million guaranteed credit facility and a
$60 million accordion facility. The Amended
2019 Credit Facility replaced the Company’s
2017 Amended Credit Facility. On
November 27, 2019, the Company entered into Amending Agreement
No.
1 to the Amended and Restated Senior Secured Credit Agreement (collectively with the Amended and Restated Senior Secured Credit Agreement, the “Amended
2019 Credit Facility”) to amend certain defined terms in connection with the Cedar acquisition.
The Amended 2019 Credit Facility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia (as amended, the “2017 Amended Credit Facility”).
In connection with the Amended
2019 Credit Facility, the Company incurred
$0.4 million of fees paid to lenders are debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the credit facility agreement and
$0.1 million have been recorded in general and administrative expenses.
The obligations of the Company under the Amended
2019 Credit Agreement are secured by a
first priority lien on substantially all of the personal property and assets of the Company and has a
-year term, maturing on
June 13, 2023.
Credit Facility Terms
The Amended
2019 Credit Facility is revolving with interest only payments with
no scheduled repayments during the term.
The Amended
2019 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The Amended
2019 Credit Facility requires that the Company to comply with the following financial covenants: (i) at all times, a Total Funded Debt to Adjusted EBITDA Ratio (as defined in the Amended
2019 Credit Agreement) of
and (ii) with respect to each fiscal quarter, an Interest Coverage Ratio (as defined in the Amended
2019 Credit Agreement) of
not less than
Further, the Company’s maximum annual Capital Expenditures cannot exceed
110% of the forecasted capital expenditures of its annual business plan. In addition, share repurchases require the Lenders’ consent if the Company’s Total Funded Debt to Adjusted EBITDA ratio exceeds
During the
three and nine months ended September 30, 2020, the Company was in compliance with these covenants.
Borrowings under the Amended
2019 Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to Adjusted EBITDA ratio and the availment type as follows:
The following table summarizes the Company’s borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):
The following table summarizes our scheduled principal repayments as of
September 30, 2020 (Dollar amounts in thousands of U.S. dollars):
Other Credit Facilities
Prior to the Company entering into the Amended 2019 Credit Facility and the 2017 Amended Credit Facility, the Company had credit agreements (collectively the “Prior Credit Facilities”) with BMO, which provided the Company with access to a treasury risk management facility and a credit card facility. All remaining credit facilities under the 2017 Amended Credit Facility and the Prior Credit Facilities have been terminated.
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