Ann: New financing agreement with Royal Bank of Canada, page-18

Improved credit arrangements ?

Longreach do you honestly believe the new deal is to do with a ‘more competitive bank’ please ?
- That is rather than the need to stave off a $1m repayment due this year by changing loans!

The last interest rate with HSBC was only 3.5% according to the Eagle Audio purchase announcement!

“Deal Funding Metrics
To recap, the full acquisition cost to purchase the Eagle Audio business is $C4.281m. The cost of debt for the proportion of the acquisition that the Company will debt fund via its existing credit facility with HSBC Bank Canada is circa-3.5% per annum (this is the Canadian Prime Rate plus 1% margin)…
….
… A condition precedent to the HSBC credit facility is evidence of raising a minimum of $C1.000 million. This will be satisfied by SMS director Stephen Forman’s agreement to provide an unsecured, short- term loan to AEM of $US800,000 on commercial terms for a 12 month period. Interest payable under the loan is at 6% per annum…”

[02/09/21 SMS Completes a Further Milestone Transaction Expected to Generate Signifcant and Sustained Valuation Upside]

I think it’s an important change that removes pressure in the short term but, I doubt the new arrangement comes at better rates.
Perhaps I am just too cynical in my view of bankers?