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interest at a fixed rate of 6.00% per annum. As security for the loan, the lender received a first priority lien on certain real
estate and other property owned by the subsidiaries within the agribusiness segment.
The revolving credit facility includes total revolving credit commitments of $195.0 million and an accordion feature
whereby amounts available under the facility may be increased by up to $55.0 million of new lender commitments upon
agent approval. As security for the revolving credit facility, the lender received a first priority lien on certain cash, inventory,
machinery, accounts receivable and other assets owned by subsidiaries of the agribusiness segment. Advances are subject to
interest charges at a rate per annum equal to the LIBOR rate for the outstanding period plus the applicable margin or a rate
per annum equal to the base rate plus the applicable margin. The principal balance of each advance shall be due and payable
on the respective maturity date but no later than October 28, 2013.
The term loan and revolving credit facility agreements contain certain financial covenants and restrictions, including the
following:
The consolidated total fixed charge coverage ratio shall not at the end of any fiscal quarter, for the rolling four fiscal
quarters then ending, be less than 1.25 to 1.00.
Working capital shall not be less than $30.0 million as of the end of each fiscal quarter.
The consolidated long-term indebtedness to consolidated net fixed assets ratio shall not exceed 0.70 to 1.00.
Total tangible net worth shall not be less than $50.0 million, with such minimum amount being increased by an
amount equal to 50% of the consolidated net income for each fiscal year, without reduction for losses.
The leverage ratio shall be not greater than 5.5 to 1.0 as of the last day of any fiscal quarter.
Annual capital expenditures are limited to $5.0 million.
The agribusiness segment was in compliance with its respective debt covenants at December 31, 2011.
Inventory Financing Arrangements
On August 15, 2011, the Company entered into two short-term inventory financing arrangements with a financial
institution. Under the terms of the financing agreements, the Company sold quantities of grain totaling $10.0 million, issued
warehouse receipts to the financial institution and simultaneously entered into agreements to repurchase the grain in future
periods. The agreements mature on January 11, 2012 and February 10, 2012. The Company has accounted for the agreements
as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the
inventory. At December 31, 2011, grain inventory and the short-term note payable were valued at $8.9 million and were
measured using Level 2 inputs.
Equipment Financing Loans
Green Plains Grain has two separate equipment financing agreements with AXIS Capital Inc. initially totaling $1.75
million (individually and collectively, the “Equipment Financing Loans”). The Equipment Financing Loans provide
financing for designated vehicles, implements and machinery. Pursuant to the terms of the agreements, Green Plains Grain is
required to make 48 monthly principal and interest payments of $43 thousand, which commenced in April 2008. See
Note 17
– Related Party Transactions
for further discussion.
Marketing and Distribution Segment
The Green Plains Trade loan is comprised of a senior secured revolving credit facility. Under the loan agreement, as
amended, the lender will loan up to $70.0 million, subject to a borrowing base equal to 85% of eligible receivables. The
balance is subject to interest charges of either: (1) Base Rate (lender’s commercial floating rate plus 2.5%); or, (2) LIBOR
plus 3.5%. At December 31, 2011, Green Plains Trade had $18.5 million in cash that was restricted as to use for payment
towards the loan agreement. Such cash is presented in restricted cash on the consolidated balance sheets. The amended
revolving credit facility expires on March 31, 2014. As of December 31, 2011, Green Plains Trade was in compliance with
all debt covenants.
The loan agreement contains certain financial covenants and restrictions, including the following:
Maintenance of a fixed charge coverage ratio not less than 1.15 to 1.0.
Capital expenditures for Green Plains Trade are restricted to $0.5 million per year.