Too many Sharks in the tank at the moment.
Shareholders who believe that TRA is in a debt straight jacket might be interested to see how the debt measures up against the banking covenants listed in the respective bond prospectuses.
From p34 of the TNRHB & p 'Something' in theTRA100 bond prospectus, the TNR banking covenants:
1/ Interest Cover Ratio:
EBITDA/ Total Interest > 3.5
2/ Leverage Ratio:
Gross Debt / EBITDA < (Requirement). Requirement varies as below
Period Requirement Issue date to 31/12/2014 3.75 01/01/2015 to 31/03/2015 3.50 01/04/2015 to 30/06/2015 3.00 01/07/2015 to 30/09/2015 2.75 01/10/2015 to 30/03/2016 2.50 01/04/2016 to 30/06/2016 2.25 01/07/2016 to 01/09/2018 2.00 01/09/2018 to maturity 2.00
Time to put the position of TRA under scrutiny at the 31-03-2018 balance date.
EBITDA/ Total Interest = [$31.133m+$5.626m+$14.344m] / $14.344m = 3.52 > 3.5 (=> O.K. - just!)
Gross Debt / EBITDA = $317.373m / $51.103m = 6.21 > 2.0 ( => fail test )
That last test in particular is a fairly nasty fail, albeit Turners have 'failed' this test before by my calculations.
Have I made a mistake in calculating particularly that latter bond covenant? Yet the Target Requirement Value in that latter covenant has varied a lot since FY2016. Is it just that banks are willing to be quite flexible with this one?
SNOOPY
Snoops ....that debt/ebitda thing might only apply to (certain/all) bank debt and not total debt
Is banking covenants eh so only want to look after their own money and not worry about other lenders like bond holders
Just a suggestion
I am pulling out all stops to get the relevant debt down. At your suggestion Winner I am only using the bank debt and subtracting off the cash balance. I am also using the figures averaged over the year, not just at the end of the year.
Net Debt / EBITDA = [0.5($230.459m+$191.708m) - 0.5($25.146m+$69.069m)] / $51.103m = 3.20 > 2.0 ( => fail test )
Still not low enough! :-(
SNOOPY