Capstone cancels proposed $300m senior notes offering
TORONTO (miningweekly.com) – Canadian base metals miner Capstone Mining on Friday said, owing to adverse general market conditions, it had pulled the plug on its proposed offering of $300-million senior notes due in 2022.
Capstone president and CEO Darren Pylot pointed out that the company wanted to “opportunistically” repay borrowings under its existing credit facilities.
"While the $300-million we were looking to raise was available, the proposed interest rate exceeded what we were prepared to pay for that purpose,” he commented.
He explained that the company currently had access to low-cost credit facilities, which, when combined with its strong cash position, strong cash flow from operations and the undrawn portion of its existing credit facilities, gave it the flexibility to only consider financing opportunities that were in line with the company’s cost-of-capital criteria.
The new $300-million senior-secured revolving credit facility, which was intended to close concurrently with the notes, was also cancelled.
The company added that its existing $200-million senior-secured corporate revolving term facility and $200-million senior-secured reducing revolving corporate credit facility would mature in October 2017 and January 2016, respectively. Both had an interest rate of US Libor plus 2.5% (adjustable in certain circumstances) and a standby fee of 0.56% on the undrawn balance of the facilities.
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