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Why the Donaco International Ltd share price is up 4% today

Much to the delight of its shareholders, the Donaco International Ltd (ASX: DNA) share price has been a big mover during trade today.

In late trade the casino operator’s shares are up over 4% to 50.5 cents.

What happened?

This morning Donaco announced that it has signed binding agreements with Mega International Commercial Bank to refinance its current term loan facility.

The company has repaid a total of US$63.4 million in the past two years, with the remaining principal amount of the current facility standing at US$56.6 million.

The refinance agreement with Mega Bank today will be for a new facility of US$57 million, with the term extended for three years from the date of drawdown.

The market appears to have responded positively to the news due to the interest rate being reduced slightly to the LIBOR six-month rate plus 6%.

Furthermore, a number of covenants controlling capital management (dividends and buybacks) have been relaxed.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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