Have I got the wrong end of the stick here.
My understanding was immediately on drawdown equity was given to Truestone at 85% of the lowest of the the VWAP of the previous 5 days.
To save everyone looking back at the Touchstone web site which Im sure they wont mind having pasted here.
"With traditional sources of capital
unavailable or too expensive,
companies are looking for other ways to
raise funds. Equity drawdowns offer an
efficient and flexible alternative.
Equity drawdowns combine the best features of conventional
equity placements and lines of credit. Structured as a contract
between company and fund, they give the company the option to
sell equity to the fund for cash up to an agreed limit.
Easy to arrange, simple to manage and reassuringly transparent,
drawdowns are an ideal solution for growing companies that want
to avoid having to raise capital at any price.
Guaranteed capital
In unpredictable markets an equity drawdown offers control.
The selected fund has to buy regardless of conditions. Access
to capital is guaranteed and the cost of that capital is known in
advance.
Maximum flexibility
Most conventional fundraising structures favour the market. With
a drawdown the company has the advantage since it can choose
when to sell and at what price.
Immediate benefit
The drawdown process is very efficient as the company receives
the capital immediately.
Shareholder protection
Drawing down when the share price is high limits dilution and
contracts can be structured to prevent shorting.
Limited risk
Substantial equity transactions have an immediate effect on
market prices. Raising capital in instalments limits this risk.
Positive news
The announcement of a successful funding strategy is good for
market confidence, sending a positive message to investors,
counterparties and partners.
Negotiating tool
Potential joint venture and off-take partners often seek equity
stakes: a strong capital position provides a stronger negotiating
position.
Convenient to arrange
There?s no need to roadshow an equity drawdown facility.
The process is quick and costs are low. Since the fund is only
assuming market risk, only limited due diligence is required.
Endlessly versatile
From fixed-term to open-ended arrangements, there is a
drawdown structure for most corporate situations. Even when
traditional capital raising options are available, a drawdown can
still be a useful alternative.
A forward move
Drawdowns make the future less uncertain. They can even be
structured like a forward contract to include fixed payment dates''
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