Vox Announces New Revolving Credit Facility of up to $25 Million with Bank of Montreal
Vox Royalty Corp. has entered into a $15 million secured revolving credit facility with the Bank of Montreal, with an additional $10 million accordion feature. The facility is secured against the company's assets and has an interest rate of Secured Overnight Financing Rate plus 2.50% to 3.50%. It can be drawn and repaid with a standby fee on the undrawn portion. The facility will be available for general corporate purposes, acquisitions, and investments, and matures on December 31, 2025, with an annual one-year extension option.
Vox Royalty Corp's new credit agreement with the Bank of Montreal introduces a $15 million secured revolving credit facility , which could significantly influence the company's financial strategy. The inclusion of an accordion feature for an additional $10 million enhances financial flexibility, potentially improving liquidity and enabling strategic acquisitions . The interest rate , pegged to the Secured Overnight Financing Rate with a variable premium based on leverage, is indicative of a cost-efficient debt instrument, likely reflecting the bank's confidence in Vox's creditworthiness.
From a financial analysis perspective, the facility's structure, with a standby fee on the undrawn portion, encourages efficient capital usage while managing the cost of potential idle funds. The arrangement and upfront fees, totaling $150,000, are relatively standard for such facilities. The flexible repayment terms and the one-year extension option provide additional strategic headroom for Vox to navigate market conditions while pursuing growth initiatives. This facility could be a catalyst for the company's future expansion, particularly in the mining royalty space where acquisitions can offer high returns on investment.
The mining royalty sector is characterized by its need for substantial capital for investments and acquisitions. Vox Royalty Corp's access to a new credit facility is a strategic move that positions the company to capitalize on acquisition opportunities that may arise. The CEO's statement emphasizes a disciplined growth approach, leveraging competitive advantages and systematic processes, which could resonate positively with investors looking for prudent management and strategic allocation of capital.
The facility's terms suggest a favorable cost of capital, which is critical in a sector where the value of assets is closely tied to commodity prices and market demand. The potential to acquire third-party royalties using a combination of cash, debt, or equity capital provides the flexibility to optimize the balance sheet and could lead to enhanced shareholder value if managed effectively. The credit agreement could also signal to the market increased financial credibility and stability for Vox, possibly impacting its stock valuation.
In the broader economic context, Vox Royalty Corp's new credit facility reflects current credit market conditions and the banking sector's willingness to lend to companies with solid fundamentals. The interest rate tied to the Secured Overnight Financing Rate indicates an alignment with prevailing economic indicators and monetary policy. The credit facility's maturity date of December 31, 2025, suggests a mid-term financial planning horizon , which is crucial given the cyclical nature of the mining industry and the potential volatility in commodity markets.
Moreover, the company's ability to secure such a facility may be indicative of a healthy banking sector with sufficient liquidity to support corporate growth. The credit agreement could be seen as a vote of confidence in the mining royalty business model, which typically provides a more stable cash flow than traditional mining operations. This stability is often favored by financial institutions, especially in an environment where interest rates and economic conditions can be uncertain.
01/16/2024 - 07:55 AM
All amounts in U.S. dollars unless otherwise indicated.
TORONTO, ON / ACCESSWIRE / January 16, 2024 / Vox Royalty Corp. (TSX:VOXR) (NASDAQ:VOXR) Vox " or the "Company "), a returns focused mining royalty company, is pleased to announce that it has entered into a definitive credit agreement with the Bank of Montreal providing for a $15 million secured revolving credit facility (the "Facility "). The Facility includes an accordion feature which provides for an additional $10 million of availability subject to certain conditions (the "Accordion "). The Company has not drawn on the Facility as of the date hereof.
The key terms of the new Facility are:
$15 million senior secured Facility;Additional $10 million Accordion; Secured against the assets of the Company; Interest rate of Secured Overnight Financing Rate plus 2.50% to 3.50% , contingent upon the Company's leverage ratio; Facility has flexibility to be drawn and repaid, with the undrawn portion subject to a standby fee of 0.5625% to 0.7875% per annum based on the undrawn amount; One-time arrangement fee of 0.50% and two-year upfront fee of 0.25% per annum on the total Facility amount, being $150,000 in the aggregate; The Facility will be available for general corporate purposes, acquisitions and investments; and Matures on December 31, 2025 with annual one-year extension option. Kyle Floyd, Chief Executive Officer, stated: "We are pleased to announce this new Facility with Bank of Montreal and appreciate the bank's strong support of the Company. This Facility dramatically decreases our cost of capital, enables Vox to pursue and acquire third-party royalties using the most cost-efficient allocation of cash on hand, debt or equity capital on a case by case basis, and potentially unlocks new acquisition opportunities within its proprietary database. We will continue to build the business with discipline, leveraging our competitive advantages and systematic processes."
About Vox
Vox is a returns focused mining royalty company with a portfolio of over 60 royalties and streams spanning eight jurisdictions. The Company was established in 2014 and has since built unique intellectual property, a technically focused transactional team and a global sourcing network which has allowed Vox to target the highest returns on royalty acquisitions in the mining royalty sector. Since the beginning of 2020, Vox has announced over 25 separate transactions to acquire over 50 royalties.
Further information on Vox can be found at www.voxroyalty.com .
For further information contact:
Cautionary Note Regarding Forward-Looking Statements and Forward-Looking Information
This press release contains "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Vox Royalty Corp. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate" "plans", "estimates" or "intends" or stating that certain actions, events or results " may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements.
The forward-looking statements and information in this press release include, but are not limited to, a potential drawdown on and use of proceeds from the Facility, as well as the potential for the Facility to unlock new acquisition opportunities.
Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements. Such forward-looking statements, including but not limited to statements relating to the Facility and the Company's business strategy, involve risks, uncertainties and other factors which may cause the actual results to be materially different from those expressed or implied by such forward-looking statements. Such factors include, among others, that the Facility will not be advanced within the expected timeframe, the ability of the Company to carry out its growth plans and other factors set forth in the Company's publicly filed documents under its profiles at www.sedarplus.ca and www.sec.gov .
Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statement prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
The forward-looking information contained in this press release represents the expectations of Vox as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward looking information and should not rely upon this information as of any other date. While Vox may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.
None of the TSX, its Regulation Services Provider (as that term is defined in policies of the TSX) or The Nasdaq Stock Market LLC accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Vox Royalty Corp.
press release on accesswire.com
Vox Royalty Corp. has entered into a $15 million secured revolving credit facility with the Bank of Montreal.
The additional amount available through the accordion feature of the new credit facility is $10 million.
The interest rate of the new credit facility is Secured Overnight Financing Rate plus 2.50% to 3.50%.
The new credit facility will be available for general corporate purposes, acquisitions, and investments.
The new credit facility matures on December 31, 2025, with an annual one-year extension option.
