The Company renewed its credit facility during 2010 and it now matures in June 2012. It is management’s intention to renew this revolving credit facility prior to its maturity and as a result there is no fixed repayment schedule.
Long-term debt bears interest at bankers’ acceptance rates plus a premium based on certain financial ratios. To manage interest rate risk and ensure stability in the Company’s interest costs, the Company has entered into interest rate swap agreements (see note 14(b)) which fix the floating bankers’ acceptance rates.
Bank indebtedness bears interest at prime and is due on demand. The Company has provided a general assignment of book debts and a first ranking fixed charge demand debenture over all freehold and leasehold real property and all equipment and a security interest and floating charge over all other property as collateral for the bank indebtedness and the revolving term credit facility.
Interest expense included $3,592,000 for interest on long-term debt (2009 – $4,305,000).