Ann: Liontown releases full-year 2024 results, page-27

The LG deal complemented what was already an incredible financing.

The bank facility which had been resized to 550m post the large equity raise was never going to sit alongside the Ford facility and share in the security.

The Ford financing is ridiculously good, beyond the terms what I like is that it keeps Ford on the hook with the offtake, not saying they would pull out but a funding arrangement be it prepay or core debt goes a long way in making the offtake stick.

To recap.
Maturity: 5yrs from commencement of supply (latest Sep 2025).
Term: June 2022 to latest Sep 2029, I.e. 7yrs 3months
Margin: bbsy +1.50%
Repayment: Quarterly from commencement of supply (latest Sep 2025), interest capitalised up to commencement of supply
Effectively 3yrs 3months of repayment grace period and unspecified balloon at maturity
Financial Covenants: None (I.e. nothing Ford can call you up on) - unbelievable

Those sort of terms are in line with investment grade mining corporates if not better in some instances.

Notwithstanding the facility was signed when Li pricing was frothy and the bank debt was being negotiated in exactly the opposite environment, it's fair to say the Ford facility trumps any other form of debt available. Bearing in mind this was project financing debt for a greenfield development.

As to why they commenced the financing discussion with banks, perhaps the funding would have reduced the equity raise component or there were other strategic reasons, we will never know.

Regardless, they have tested the banking market and had credible interest in a depressed market environment, commitments from lenders, ltr chose to go a different path.

All going well, the work done with banks is not wasted, that option can be revisited in time, hopefully in a better market environment and more favourable terms once the project is fully de-risked (both market and operational).

Aimo