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Note 7 - Loan Payable | 3 Months Ended
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Mar. 31, 2019
Notes to Financial Statements |
Debt Disclosure [Text Block] | 7. Loan payable: 2017 Amended Credit Facility On January 20, 2017, the Company entered into a secured Credit Agreement (the “2017 Amended Credit Facility”) with Bank of Montreal (“BMO”), Royal Bank of Canada and Bank of Nova Scotia (collectively BMO, the “Lenders”) under which the Company has access to an aggregate of up to $140 million in funds. In connection with the 2017 Amended Credit Agreement, the Company incurred $0.6 million of fees paid to lenders and debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the credit facility agreement. The obligations of the Company under the 2017 Amended Credit Facility are secured by a first priority lien on substantially all of the personal property and assets of the Company. The 2017 Amended Credit Facility has a four -year term. The 2017 Amended Credit Facility has a four -year term. Under the 2017 Amended Credit Facility, the Company has access to an aggregate of up to $140 million in funds that are available as follows:
| ● | a $5 million revolving credit facility (“Facility A”);
| ● | a $15 million revolving reducing term facility (“Facility B”);
| ● | a $35.5 million non-revolving facility (“Facility C”); and
| ● | a $84.5 million non-revolving facility (“Facility D”).
On March 18, 2019, the Company entered into the Second Amendment to the 2017 Credit Facility to provide the Lenders consent for the acquisition of Ascio (discussed in Note 4 (b) – Acquisitions) and to reallocate borrowing limits between loan facilities. As a result of the Second Amendment to the 2017 Credit Facility, the borrowing limit of Facility B was decreased by $9 million to $6 million, and the borrowing limit of Facility C was increased by $9 million $44.5 million. All other terms associated with the 2017 Amended Credit Facility remained the same. We incurred costs associated with the Second Amendment to the 2017 Credit Facility of $0.2 million, which have been capitalized and will amortize over the term of the loan. Borrowings under the 2017 Amended Credit Facility accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA as described below. The purpose of Facility A is for general working capital and general corporate requirements, while Facility B and Facility C support share repurchases, acquisitions and capital expenditures associated with the Company’s Fiber to the Home program (“FTTH”). Facility D was provided and used for the acquisition of eNom. The repayment terms for Facility A require monthly interest payments with any final principal payment becoming due upon maturity of the 2017 Amended Credit Facility. Under the repayment terms for Facility B, at December 31st of each year, balances drawn during the year that remain outstanding will become payable on a quarterly basis commencing the first quarter of the following year, for the period of amortization based on the purpose of the draw. For Facilities C and D, each draw will become payable beginning the first full quarter post initial draw for the period of amortization based on the purpose of the draw. The amortization periods for Facilities B, C and D are based on the purposes of the draws as follows: draws for share repurchases are repaid over four years, draws for acquisitions over five years and draws for FTTH capital expenditures over seven years. The 2017 Amended Credit Facility also includes a mechanism that is triggered based on the Company’s Total Funded Debt to EBITDA calculation at the end of each fiscal year. If Total Funded Debt to EBITDA exceeds 2.25:1 at December 31 of any year during the term, the Company is obligated to make a repayment of 50% of Excess Cash Flow in that year as defined under the agreement. The 2017 Amended Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2017 Amended Credit Facility requires that the Company to comply with the following financial covenants at all times, which are to be calculated on a rolling four quarter basis: (i) maximum Total Funded Debt to EBITDA Ratio of 2.25:1; and (ii) minimum Fixed Charge Coverage Ratio of 1.20:1. Further, the Company’s maximum annual Capital Expenditures cannot exceed $65.0 million per year, which limit will be reviewed on an annual basis. In addition, funded share repurchases are not to exceed $20 million, or up to $40 million so long as the total loans related to share repurchases do not exceed 1.5 times of trailing twelve months EBITDA. As at and for the periods ending March 31, 2019, and March 31, 2018, the Company was in compliance with these covenants. Borrowings under the 2017 Amended Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to EBITDA ratio and the availment type as follows:
|  | If Total Funded Debt to EBITDA is: |
Availment type or fee |  | Less than 1.00 |  |  | Greater than or equal to 1.00 and less than 2.00 |  |  | Greater than or equal to 2.00 and less than 2.25 |  |  | Greater than or equal to 2.25 |
Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin) |  |  | 2.00 | % |  |  | 2.25 | % |  |  | 2.75 | % |  |  | 3.25 | %
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin) |  |  | 0.75 | % |  |  | 1.00 | % |  |  | 1.50 | % |  |  | 2.00 | %
Standby fees |  |  | 0.40 | % |  |  | 0.45 | % |  |  | 0.55 | % |  |  | 0.65 | %
The following table summarizes the Company’s borrowings under Facilities A – D (Dollar amounts in thousands of U.S. dollars ) :
|  | March 31, 2019 |  |  | December 31, 2018 |
Facility A |  | $ | 1,000 |  |  | $ | 1,000 |
Facility B |  |  | 5,786 |  |  |  | 6,000 |
Facility C |  |  | 36,012 |  |  |  | 3,232 |
Facility D |  |  | 50,699 |  |  |  | 54,924 |
Less: unamortized debt discount and issuance costs |  |  | (683 | ) |  |  | (555 | )
Total loan payable |  | $ | 92,814 |  |  | $ | 64,601 |
Less: loan payable, current portion |  |  | (24,788 | ) |  |  | (18,400 | )
Loan payable, long-term portion |  | $ | 68,026 |  |  | $ | 46,201 |
The following table summarizes our scheduled principal repayments as of March 31, 2019 ( Dollar amounts in thousands of U.S. dollars):
Remainder of 2019 |  |  | 18,591 |
2020 |  |  | 24,788 |
2021 |  |  | 50,118 |
|  |  | 93,497 |
Other Credit Facilit ies Prior to the Company entering into the 2017 Amended Credit Facility, the Company had credit agreements (collectively the “Prior Credit Facilities”) with BMO, which provide the Company with continued access to a treasury risk management facility and a credit card facility. All remaining credit facilities under the Amended Credit Facility have been terminated. The treasury risk management facility under the Prior Credit Facilities provides for a $3.5 million settlement risk line to assist the Company with hedging Canadian dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Prior Credit Facilities, the Company may enter into such agreements at market rates with terms not to exceed 18 months. As of March 31, 2019, the Company held contracts in the amount of $30.6 million to trade U.S. dollars in exchange for Canadian dollars. See Note 5 – Derivative instruments and hedging activities for more information.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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