17 operations, 6 development projects
We own, or have an interest in 12 mines in Canada, the US, Chile and Peru; a large metallurgical complex; wind power facility, specialty metals - germanium and indium, and exploring for copper, zinc, gold in the Americas, Asia Pacific, Europe and Africa.
Message: Bridge and Term Loan Extension-US$4.4 Billion of 2009 Payments Deferred
| April 21, 2009 | |
| Teck Announces Bridge and Term Loan Extension-US$4.4 Billion of 2009 Payments Deferred | |
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 21, 2009) - Teck Cominco Limited ("Teck") (TSX:TCK.A and TCK.B, NYSE:TCK) announced today that it has entered into a commitment letter to amend its existing US$4 billion senior term loan facility (the "Term Facility") and US$5.81 billion senior bridge loan facility (the "Bridge Facility", and together with the Term Facility, the "Facilities"). The lenders have agreed, on the conditions set out in the commitment letter, among other things, to: - defer US$4.4 billion of payments previously scheduled in 2009, - extend the maturity date of US$3.5 billion of the Bridge Facility from October 29, 2009 to October 30, 2011, and - reschedule approximately US$3.3 billion of amortization payments under the Term Facility, with 50% of that rescheduled amount payable in quarterly installments during 2012 Teck President and Chief Executive Officer Don Lindsay said: "This rescheduling of our bridge and term debt will give Teck the time to most effectively execute our asset sales program to significantly reduce our current debt and to access the debt capital markets to replace short term debt obligations with longer term financing more appropriate to our portfolio of long-life assets." Under the commitment letter, Teck will be required to reduce the approximately US$5.2 billion currently outstanding under the Bridge Facility to US$3.5 billion by October 30, 2009, with the remaining amounts outstanding under the Bridge Facility being due October 30, 2011. Changes to the existing amortization schedule under the Term Facility will be subject to individual lender consent, with holders of 83.6% of the Term Facility loans having provided commitments under the commitment letter. Based on the commitments of the holders of 83.6% of the Term Facility loans, semiannual amortization payments of US$418 million will be due at the end of April and October of 2010 and 2011 and quarterly payments of US$418 million will be due at the end of each calendar quarter in 2012. On the amendments becoming effective, the remaining mandatory payments previously due by October 30, 2009 will be reduced from US$6.3 billion to approximately US$1.9 billion. The table below summarizes the mandatory payments on the Facilities before and after the amendments. (in billions of U.S. dollars) 2009 2010 2011 2012 Total ---------------------------------------------------------------------------- Pre-amendment mandatory payments $ 6.274 $ 1.455 $ 1.454 $ - $ 9.183 Increase (decrease) (4.412) (0.380) 3.120 1.672 - ---------------------------------------------------------------------------- Amended mandatory payments $ 1.862 $ 1.075 $ 4.574 $ 1.672 $ 9.183 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- The obligations of Teck under the Facilities will be guaranteed by Teck Cominco Metals Ltd., Teck Cominco Coal Partnership, and all other subsidiaries of Teck, subject to certain exceptions, and will be secured by a first priority security interest in all of the material properties of Teck and each guarantor, with provision for the release of the security interest in connection with permitted asset sales. The security will fall away upon full repayment of the Bridge Facility and Teck receiving investment grade credit ratings with stable outlooks from both Moody's and S&P. Teck's existing bonds will be secured pari passu to the extent required under the negative pledge in the relevant trust indenture. The Bridge Facility will be required to be prepaid in an amount equal to 100% of the net proceeds from asset sales or the incurrence or issuance of new debt or equity (subject to mutually agreed exceptions), as well as 100% of the net proceeds received from tax refunds associated with the Fording acquisition. Any proceeds from asset sales, capital market transactions and/or operating cash flow must be applied to the Bridge Facility balance, subject to a minimum cash balance of CdnS$500 million, deductions for certain environmental and reclamation obligations and funds placed in escrow, if any, to meet the next scheduled Term Facility amortization payment. Once all amounts outstanding under the Bridge Facility have been paid in full, the Term Facility will also be subject to prepayment requirements in respect of asset sales proceeds, new debt or equity and a cash sweep to be agreed. As a consequence of the amendments, until the Bridge Facility is repaid in full, a specified majority of Bridge Facility lender affiliates will be entitled to issue a securities demand to Teck, requiring Teck to issue debt securities to refinance the Bridge Facility, on terms and in amounts required by such lenders, subject to certain conditions and limitations. The amended Facilities will contain covenants in addition to those contained in the original Bridge Facility and Term Facility, including restrictions on new indebtedness, new liens, acquisitions and dispositions, capital expenditures and distributions. The debt to total capitalization covenant in Teck's current credit agreements will be replaced in the amended Facilities with a minimum interest coverage covenant and a maximum leverage covenant. Both of these tests will be calculated at the end of each calendar quarter based on EBITDA and interest expense for the previous twelve months. The obligations of the lenders to amend the Term Facility and the Bridge Facility pursuant to the commitment letter are subject to various conditions, including the settlement and execution of definitive financing documentation in form and substance satisfactory to the lenders, the making of corresponding amendments to Teck's revolving and bilateral credit agreements, the granting of first-priority security interests in the material property of Teck and its guarantors, there not having been a material adverse effect in respect of Teck, the payment by Teck, as a prepayment of the Bridge Facility, of all tax refunds received by it or any of its subsidiaries that are attributable to the Fording acquisition, and other customary conditions precedent. A copy of the commitment letter will be available on SEDAR at www.sedar.com and at the SEC website at www.sec.gov. |
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