On January 12, Canada-based Consolidated Thompson Iron Ore Mines Ltd (CLM) announced that it has entered into an agreement to issue US$100 million senior secured bonds to Canadian credit fixed income manager Marret Asset Management Inc. This new financing effectively replaces a stand-by facility previously announced on May 12, 2009.
The new agreement will increase the amount of financing available to CLM by $25 million. Pursuant to the agreement, the bonds will have a maturity of seven years from the date of closing, will provide for semi-annual interest payments at a rate of 8.5 percent per annum and be subject to redemption by CLM at any time after four years from the date of issue. The funds will be used for general corporate purposes including the potential expansion at the Bloom Lake iron ore mine in Quebec. The previous agreement provided for a maturity term of three years with an annual interest rate of 15 percent.
"These revised terms show the progress accomplished with the Bloom Lake project by the Consolidated Thompson team and the recognition by the financial community of the reduction in the level of risk borne by the project which will begin commercial production in the next few weeks. It also provides the additional financial flexibility to accelerate any desired capacity expansion at the Bloom Lake mine," Consolidated Thompson's president and CEO Richard Quesnel stated.