The Operating Line is secured by a general security agreement which includes a security interest in all accounts receivable and inventories, charges against timber tenures, and mortgage security on sawmills. The Operating Line is subject to certain financial covenants including a minimum working capital requirement, a maximum ratio of total debt to total capitalization and a minimum net worth calculation.
As at March 31, 2013 the Operating Line was drawn by US$2,000,000 (December 31, 2012 - $nil) revalued at the quarter-end exchange rate to $2,032,000 plus outstanding letters of credit.
(b) Revolving Term Line:
On February 27, 2013, the Company extended the maturity of its existing revolving term line of credit ("Revolving Term Line") to February 27, 2017 and increased the credit available from $200,000,000 to $250,000,000. All other terms and conditions of this line remain unchanged except for a reduction in pricing.
The Revolving Term Line may be drawn in either CAD$ or US$ advances, and bears interest at bank prime plus a margin or, at the Company's option, at rates for Bankers' Acceptances or LIBOR based loans plus a margin, and in all cases dependent upon a financial ratio of total debt divided by twelve months' trailing EBITDA(1). The Revolving Term Line is secured by a general security agreement which includes a security interest in all accounts receivable and inventories, charges against timber tenures, and mortgage security on sawmills. The line is subject to certain financial covenants including a minimum working capital requirement and a maximum ratio of total debt to total capitalization and a minimum net worth calculation.
As at March 31, 2013, the Revolving Term Line was drawn by US$100,200,000 (December 31, 2011 - US$30,200,000) revalued at the quarter-end exchange rate to $101,803,000 (December 31, 2012 - $30,046,000), and $110,000,000 (December 31, 2012 - $105,000,000) for total drawings of $211,803,000 (December 31, 2011 - $135,046,000).
Drawings of US$100,200,000 under the Revolving Term Line have been designated as a hedge against the Company's investment in its U.S. operations and unrealized foreign exchange gains of $441,000 (Quarter 1, 2012 - $589,000 gain) arising on revaluation of the Revolving Term Line were recognized in Foreign exchange translation differences in Other comprehensive income.
Minimum principal amounts due on long-term debt within the next five years are follows:
--------------------------------------------Twelve months ending March 31, 2014 $ - March 31, 2015 - March 31, 2016 - March 31, 2017 213,835 March 31, 2018 --------------------------------------------- $ 213,835--------------------------------------------
(c) Cash and cash equivalents:
At March 31, 2013 the Company's cash balances were restricted by $46,000 for contractor holdbacks (December 31, 2012 - $652,000).
(1) EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization.
8. Finance costs:
-------------------------------------------------------------------------- 3 Months 3 Months Mar. 31, Mar. 31, 2013 2012--------------------------------------------------------------------------Interest on borrowing $ 1,513 $ 1,276Interest on defined benefit obligations 48 31Accretion expense 96 113Amortization of prepaid finance costs 131 153-------------------------------------------------------------------------- $ 1,788 $ 1,573--------------------------------------------------------------------------
