Southwest Iowa Renewable Energy, Llc Enters into Amendment No. 5 to Credit Agreement with Farm Credit Services of America Flca, Farm Credit Services of America, PCA and CoBank
March 04, 2021 at 05:55 pm
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Southwest Iowa Renewable Energy, LLC entered into Amendment No. 5 to Credit Agreement with Farm Credit Services of America, FLCA, Farm Credit Services of America, PCA and CoBank, ACB, to amend the company’s existing Credit Agreement dated as of June 24, 2014, as amended by Amendment No. 1 dated as of February 11, 2015, Amendment No. 2 dated as of February 11, 2015, Amendment No. 3 dated as of January 25, 2016, and Amendment No. 4 dated as of November 14, 2019. In connection with the Fifth Amendment, the company and one of its subsidiaries SIRE DISC Inc. entered into a Global Modification to Loan Documents with FLCA, PCA, and CoBank, which expressly added PCA as a Lender to the company under the Credit Agreement, Restated Term Note, New Revolving Credit Note and certain other loan documents and debt instruments of the company. The following are the key modifications made by the Fifth Amendment: The company’s existing First Amended and Restated Term Note is replaced in its entirety by a new Second Amended and Restated Term Note with a maximum principal amount of $30,000,000, a maturity date of November 15, 2024, and an interest rate of LIBOR + 340 basis points. The Restated Term Note required the company make one principal payment of $3,750,000 during 2021, which payment was made on March 1, 2021, and thereafter requires the Company to make four equal semi-annual payments of $3,750,000 on each March 1 and September 1, through September 1, 2023. All remaining amounts due under the Restated Term Note are due and payable on the maturity date. The Company’s existing First Amended and Restated Revolving Term Note was amended to provide that the current interest rate of LIBOR + 340 basis points is now subject to change as discussed below. The company entered into a new Revolving Credit Note with a maximum draw amount of $10,000,000, a maturity date of August 1, 2021 and an interest rate of LIBOR + 340 basis points. The full amount of this New Revolving Credit Note is available on a revolving basis from time to time through maturity. The provisions of the Restated Term Note, Restated Revolving Term Note, and New Revolving Credit Note are amended to provide for the adjustment of the interest rate applicable to each of the foregoing in connection with the phasing out of LIBOR. The Credit Agreement previously calculated the interest rates for the each of the Notes as LIBOR plus a 340 basis point spread. The Fifth Amendment provides that the interest rate for each Note is calculated using LIBOR + 340 basis points until the occurrence of certain events. Upon the earliest occurrence of one of the specified events, the interest rate applicable to the Notes converts to a variant of the secured overnight financing rate, as established from time to time by the Federal Reserve Bank of New York, plus a corresponding spread. Except as set forth in the Fifth Amendment, all other terms of the Credit Agreement remain in full force and effect. The credit facility continues to be secured by substantially all of the company’s assets.
Southwest Iowa Renewable Energy, LLC is engaged in the production of ethanol. The Company sells its ethanol, distillers grains, corn condensed distillers soluble, distillers corn oil and carbon dioxide (CO2) in the continental United States, Mexico and the Pacific Rim. Its production facility (the Facility) is located in Pottawattamie County in southwestern Iowa, south of Council Bluffs. The principal purchasers of ethanol are wholesale gasoline marketers or blenders. The Company produces approximately 123.3 million and 127.0 million gallons of ethanol. It produces two forms of distillers grains, namely wet distillers grains with solubles (WDGS) and dried distillers grains with solubles (DDGS). The Company's system separates corn oil from the post-fermentation syrup stream as it leaves the evaporators of the ethanol plant. The corn oil is then routed to storage tanks, and the remaining concentrated syrup is routed to the plantâs syrup tank.
Southwest Iowa Renewable Energy, Llc Enters into Amendment No. 5 to Credit Agreement with Farm Credit Services of America Flca, Farm Credit Services of America, PCA and CoBank