PARKS AMERICA, INC 8-K

What Happened

• Parks! America, Inc. (through its wholly owned subsidiary Aggieland-Parks, Inc.) announced a refinancing completed June 17, 2026 and filed on Form 8-K on June 24, 2026. The new 2026 Term Loan with Cendera Bank has a $2.33 million principal, a seven-year term, 25‑year amortization and a balloon payment due June 1, 2033.
• Aggieland-Parks also entered a Promissory Note Rate Conversion Agreement with SouthState Bank, N.A. (doing business as ARC Fixed Rate Provider) to convert the loan’s variable SOFR-based rate into a fixed 6.99% cash‑flow hedge for the loan term.

Key Details

• Principal: $2.33 million; maturity/balloon payment: June 1, 2033; estimated initial monthly payment ≈ $16,561.
• Variable rate formula: CME 1‑month term SOFR + 2.70% (CME 1‑month term SOFR was 3.64% on June 17, 2026, implying an initial floating rate of ~6.34% before the swap).
• Fixed-rate hedge: interest rate swap via ARC Fixed Rate Provider fixes interest at 6.99% for the loan term.
• Security & covenants: loan secured by substantially all Aggieland-Parks assets; guaranteed by Parks! America, Inc.; covenant requires both guarantor and borrower to maintain a minimum trailing 12‑month Debt Service Coverage Ratio of at least 1.20x. The refinancing also removed a prior $2.5M cash collateral reserve requirement.

Why It Matters

• The company replaced the prior loan terms with a new $2.33M facility and fixed the interest cost at 6.99%, reducing exposure to rising short‑term rates. That provides predictable interest expense for the loan term but does not eliminate principal repayment obligations (balloon due 2033).
• The loan is secured and guaranteed by the parent, and includes a 1.20x debt service coverage covenant that management must meet; covenant compliance and the balloon maturity are material to liquidity and refinancing risk for investors.