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2007-2008 ANNUAL REPORT
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69
10
S A S K A T C H E WA N I N D I A N G A M I N G A U T H O R I T Y I N C .
Notes to the Consolidated Financial Statements
Year ended March 31, 2008
10. Long-Term Debt – continued:
In 2007, the Bank advanced interim financing of $21,802,749 related to construction of the Dakota Dunes
Casino. This loan is referred to as Construction Facility Tranche A – Floating Rate. On March 31, 2008, this
interim financing was converted to a long-term loan. SIGA will amortize this loan over the next 15 years
with a variable interest rate based on bankers acceptance rate plus 1%. This loan is referred to as Term Loan
Tranche D – Floating Rate.
Also, in 2007 the Bank advanced interim financing of $3,193,530 related to construction of the Living Sky
Casino. This loan is referred to as Construction Facility Tranche B.
The long-term financing agreement is secured by a general security agreement and mortgage of leasehold
interest of SIGA’s casinos.
The long-term debt obligations are as follows:
Construction Facility Tranche B
(interest payable only at prime – 5.25% at March 31)
3,193,530
Term Loan Tranche D – Fixed Rate
(repayable in monthly installments of $165,355
including interest at 5.68%, maturity April 2023)
20,000,000
Term Loan Tranche D – Floating Rate
(repayable in monthly installments of $116,667
plus interest at 4.59%, maturity April 2023)
21,802,749
44,996,279
Less current portion
(2,270,288)
$ 42,725,991
Principal repayments required for the above loans are as follows:
2009
$ 2,270,288
2010
2,321,047
2011
2,374,765
2012
2,431,617
2013
2,491,784
2014 and subsequent
33,106,778
The carrying value of the long-term debt approximates its fair value as the interest rates and terms are
similar to what would be currently available for debt of similar terms and maturities.
In order to manage its interest rate risk exposure, SIGA entered into separate interest rate swap
arrangements for the Dakota Dunes, Living Sky and Painted Hand construction projects on December 12,
2007. These arrangements will fix the interest rates for the loan for each construction project at 4.94%,
5.09% and 5.09% respectively over the term of the loans. The interest rate swap arrangements come
into effect for the Dakota Dunes construction project on April 1, 2008 and the Living Sky and Painted
Hand construction projects on April 1, 2009. A liability has been set up for $835,840 which represents
the difference between the fixed rate to be paid and the variable rate to be received at March 31, 2008.
Changes in the liability amount are recorded as a gain or loss and are included in miscellaneous expenses.