Keybridge Capital Limited

Media Releases

Quarterly Update
11 April 2011

  • Keybridge’s banks have agreed to extend its debt facility
  • Company continues to realise investments and repay debt
  • Strong Australian Dollar adds to foreign currency losses

Debt Facility

The outstanding principal amount under Keybridge's corporate debt facility is approximately $102 million. The Company’s banks have agreed to extend the maturity date of this facility from June 2011 to June 2012. Key terms for the extension are outlined in Attachment 1. In summary, they are as follows:

  • The facility is to be fully denominated in US Dollars, compared with the current position whereby approximately 78% is denominated in US Dollars and 22% in Australian Dollars.
  • Minimum principal repayments of $12.5 million are required in the period from 31 December 2010 to 2 December 2011.
  • The borrowing margin continues to be 3.75% per annum.
  • The additional fee of 1.75% per annum which has been accruing under the facility on top of the margin is to be reduced from the time that these changes are documented to a maximum of 1.50% per annum. New accruals of this fee will be reduced further if the Company achieves certain repayment levels above the minimum requirement of $12.5 million. If repayments to the banks of $20.0 million are achieved in the period from 31 December 2010 to 2 December 2011, the additional fee will be zero from the time that these changes are documented.

It is anticipated that documentation for the new facility terms should be completed by the end of April 2011.

Investments Portfolio

Keybridge Capital is not currently undertaking new investments. It is managing its existing portfolio with the aim of bringing forward repayments, so as to reduce the Company's level of debt. Where this is not practicable, the Company is seeking to protect the value of its investments as much as possible.

As a result of repayments and movements in foreign exchange rates, the composition by asset class of Keybridge's investments portfolio as at the date of this report is approximately as follows:

% of Total

Since 31 December 2010, Keybridge has made repayments under its debt facility of approximately $8 million. This amount will contribute towards satisfying the minimum repayment obligation now required to be achieved by 2 December 2011.

These repayments were facilitated, in the main, by realisations from Keybridge’s Lending transactions, which were achieved at levels at or above the Company's carrying values.

Most investments are performing as anticipated at the last balance date of 31 December 2010. An exception would be the shipping asset class, which continues to underperform, with the demand for vessels in certain sectors failing to keep pace with the number of new ships being built.


Keybridge currently has approximately $6 million of cash-on-hand. There is a shortfall between the Company’s operating income and its fixed commitments of bank interest and operating costs. This shortfall has been more than accommodated up until now from cashflow raised from the realisation of investments. We anticipate this will continue to be the case over the next 12 months.

Currency Exposure

The approximate currency breakdown of the Company’s assets and liabilities is as follows:

US Dollars
Australian Dollars

This net foreign currency asset position means that the Company incurs translation losses when the Australian Dollar appreciates in value against the US Dollar and Euro. Over the past three months, the Australian Dollar has continued to increase in value against the US Dollar, resulting in unrealised foreign currency losses for the Company.

Following the extension of the banking facility, all of the Company’s borrowings will be denominated in US Dollars. This will switch approximately $22 million of the Company’s liabilities from Australian Dollars to US Dollars, which will reduce Keybridge’s exposure to movements in the AUD/USD exchange rate. It will, however, crystallise a portion of the unrealised foreign exchange losses that will have been accrued up until then.

Key Debt Terms (Attachment 1)

Currency The facility is to be fully denominated in US Dollars. This compares with the current position, whereby approximately 78% of the outstanding debt is denominated in US Dollars and 22% in Australian Dollars.
New Maturity Date 2 June 2012
Cash Sweep To be maintained as per current arrangements, with all surplus
cashflow being used to make repayments to the banks.
Review Event Minimum principal repayments of $12.5 million are required in the
period from 31 December 2010 to 2 December 2011.
Margin Margin above LIBOR continues to be 3.75% pa.
Additional Fee

In addition to the Margin, since December 2009, there has been an additional fee accruing under the facility equal to 1.75% pa. Upon execution of documentation for the extension, the accrued amount of this fee of approximately $3.3 million will be capitalised into the aggregate debt amount. From that time, the fee will accrue at a reduced rate of 1.50% pa. New accruals of this fee will be waived, however, if debt repayments in the period from 31 December 2010 to 2 December 2011 reach certain levels:

Repayments 31/12/10 - 2/12/11 Amount of New Fee Waived
$15.0m 0.50%
$17.5m 1.00%
$20.0m 1.50%*

* That is, if $20.0 million of repayments are achieved, new accruals of the additional fee will be waived in full.

Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping and infrastructure.


For further information, please contact:

Mark Phillips
Managing Director
Tel: +61 2 9321 9000