Allied Nevada bankruptcy triggers cross-currency, diesel swap defaults

By Caroline Salls

Pittsburgh, March 18 – Allied Nevada Gold Corp.’s Chapter 11 bankruptcy filing constituted an event of default under its cross-currency and diesel swap agreements, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The company said the out-of-money exposures under each of its outstanding cross-currency and diesel swaps can be accelerated after an event of default.

On March 10, Allied Nevada received a notice of early termination from each of the counterparties to these swaps.

Specifically, the Bank of Nova Scotia designated March 11 as the early termination date under swaps with an $86.3 million close-out amount; National Bank of Canada sent a notice to terminate all outstanding transactions, designating March 10 as the early termination date under swaps with a $12.6 million close-out amount; and Societe Generale sent a notice designating an early termination event, designating March 11 as the early termination date under swaps with a $10.37 million close-out amount.

National Bank of Canada exercised its right against letters of credit and cash collateral and claimed the company owes roughly $371,000 after realization of the collateral.

In addition, Societe Generale exercised its right against letters of credit and cash collateral and claimed Allied Nevada owes about $519,000 after realization of the collateral.

Allied Nevada is a Reno, Nev., gold and silver miner that filed for bankruptcy on March 10 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 15-10503.

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