Cardinal Ethanol, LLC Announces Amendment Extends the Termination Date of the Revolving Credit Loan from February 28, 2020 to February 28, 2021
March 30, 2020 at 10:38 pm IST
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On March 30, 2020, Cardinal Ethanol, LLC and its primary lender, First National Bank of Omaha, executed a Fifteenth Amendment of First Amended and Restated Construction Loan Agreement to be effective as of February 28, 2020, which amends the First Amended and Restated Construction Loan Agreement dated June 10, 2013. The Amendment extends the termination date of the Revolving Credit Loan from February 28, 2020 to February 28, 2021. In addition, the Amendment modifies the definition of "LIBOR Rate" in order to provide for a process for the parties to agree upon a new interest rate index and margin to be applied to that index in the event that FNBO determines that the LIBOR Rate is unavailable or unreliable. The Amendment provides that FNBO, acting in a commercially reasonable manner, will propose to Cardinal (i) a replacement interest rate index that gives due consideration to the then prevailing market convention for determining a rate of interest for comparable bank-originated commercial loans in the United States at such time; and (ii) any change necessary to the applicable margin in order to approximate the then current interest rate on the loans. The Agreement may then be amended to reflect these changes with Cardinal's prior written consent, which consent shall not be unreasonably withheld, delayed, or conditioned. Finally, the Amendment provides for a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly on a rolling four quarter average basis if Cardinal's working capital is less that $23,000,000 for any reporting period. The Amendment also provides for a debt service charge coverage ratio of no less than 1.25:1.0 measured quarterly on a rolling four quarter average basis, in lieu of the fixed charge coverage ratio, if Cardinal's working capital is equal to or more that $23,000,000. The Amendment reduces the applicable threshold from $25,000,000 to $23,000,000.
Cardinal Ethanol, LLC and its subsidiaries is engaged in producing fuel-grade ethanol, distillers grains, corn oil and carbon dioxide near Union City, Indiana and sells these products throughout the continental United States. In addition, the Company procures, transports, and sells grain commodities through grain operations. Its divisions include ethanol and trading. Its ethanol division markets and sells ethanol and its co-products primarily in the continental United States using third party marketers. Its ethanol products are marketed by Murex, LLC and distillers grains are marketed by CHS, Inc. It markets and distributes all the corn oil it produces directly to end users and third-party brokers. The Company's trading division has a grain loading facility within its single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. It performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production.