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Note 7 - Loan Payable
 9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. Loan Payable:

 

Amended 2019 Credit Facility

 

On June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald), LLC entered into an Amended and Restated Senior Secured Credit Agreement with Royal Bank of Canada (“RBC”), as administrative agent, and lenders party thereto (collectively with RBC, the “Lenders”) under which the Company has access to an aggregate of up to $240 million in funds, which consists of $180 million guaranteed credit facility and a $60 million accordion facility. On November 27, 2019, the Company entered into Amending Agreement No. 1 to the Amended and Restated Senior Secured Credit Agreement (collectively with the Amended and Restated Senior Secured Credit Agreement, the “Amended 2019 Credit Facility”) to amend certain defined terms in connection with the Cedar acquisition.

 

The Amended 2019 Credit Facility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia.

 

The obligations of the Company under the Amended 2019 Credit Agreement are secured by a first priority lien on substantially all of the personal property and assets of the Company and has a four-year term, maturing on June 13, 2023.

 

Credit Facility Terms

 

The Amended 2019 Credit Facility is revolving with interest only payments with no scheduled repayments during the term.

 

The Amended 2019 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The Amended 2019 Credit Facility requires that the Company to comply with the following financial covenants: (i) at all times, a Total Funded Debt to Adjusted EBITDA Ratio (as defined in the Amended 2019 Credit Agreement) of 3.50:1; and (ii) with respect to each fiscal quarter, an Interest Coverage Ratio (as defined in the Amended 2019 Credit Agreement) of not less than 3.00:1. Further, the Company’s maximum annual Capital Expenditures cannot exceed 110% of the forecasted capital expenditures of its annual business plan. In addition, share repurchases require the Lenders’ consent if the Company’s Total Funded Debt to Adjusted EBITDA ratio exceeds 2.00:1. During the three and nine months ended September 30, 2021, and the three and nine months ended September 30, 2020 the Company was in compliance with these covenants. 

 

Borrowings under the Amended 2019 Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to Adjusted 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 2.50     Greater than or equal to 2.50  

Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin)

     1.50 %     1.85 %     2.35 %     2.85 %

Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin)

     0.25 %     0.60 %     1.10 %     1.60 %

Standby fees

     0.30 %     0.37 %     0.47 %     0.57 %

 

The following table summarizes the Company’s borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars): 

 

   

September 30, 2021

    

December 31, 2020

  
                 

Revolver

   $ 150,400     $ 122,400  

Less: unamortized debt discount and issuance costs

     (463 )     (667 )

Total loan payable

     149,937       121,733  

Less: loan payable, current portion

     -       -  

Loan payable, long-term portion

   $ 149,937     $ 121,733  

 

The following table summarizes our scheduled principal repayments as of  September 30, 2021 (Dollar amounts in thousands of U.S. dollars):

 

Remainder of 2021

   $ -  

2022

     -  

2023

     150,400  
    $ 150,400