Debt

12 Months Ended

Dec. 31, 2023

Long-term debt at the balance sheet dates consisted of:


		December 31, 2023						December 31, 2022
	Interest Rate at December 31, 2023	Principal		Unamortized Debt Costs		Total		Principal		Unamortized Debt Costs		Total
Term loan credit agreement maturing 2028, fixed interest rate	9.1%	$	150.0	$	(2.8)	$	147.2	$	—	$	—	$	—
2014 Notes, maturing 2025, fixed interest rate	—%	—		—		—		270.0		(0.5)		269.5
2020 Notes, maturing 2028, fixed interest rate	4.8%	275.0		(2.4)		272.6		275.0		(2.9)		272.1
ABL Credit Agreement, variable interest rates	6.7%	20.0		—		20.0		—		—		—
Finance leases		23.3		—		23.3		24.2		—		24.2
Total debt		468.3		(5.1)		463.1		569.2		(3.4)		565.8
Less: current portion		(0.8)		—		(0.8)		(0.9)		—		(0.9)
Net long-term portion		$	467.4	$	(5.1)	$	462.3	$	568.3	$	(3.4)	$	564.9

During 2023, we redeemed the 2014 Notes in full. This redemption resulted in a loss on early debt extinguishment of $3.1 million consisting of $0.4 million related to the write off of unamortized debt costs along with the premium on debt redemption of $2.7 million.

Deferred debt costs are amortized over the life of the related debt using a straight-line basis which approximates the effective interest method. Deferred debt costs associated with our current line of credit is recorded within "Other assets, net" on our Consolidated Balance Sheets.

The fair value of our debt as of December 31 is included in the following table:


	2023		2022
Term loan credit agreement, maturing 2028, fixed interest rate	$	150.6	$	—
Revolving credit facility, maturing 2027, variable interest rate	20.0		—
2014 Notes, maturing 2025, fixed interest rate	—		263.1
2020 Notes, maturing 2028, fixed interest rate	255.1		241.2
	$	425.7	$	504.3

TERM LOAN CREDIT AGREEMENT

On October 27, 2023, we entered into the PCA Credit Agreement with the lenders party thereto and AgWest Farm Credit, PCA, as administrative agent. The PCA Credit Agreement consists of a revolving term loan commitment of $270 million, $150 million of which was advanced at closing. This advance, along with a $60 million draw on the ABL Credit Agreement and cash on hand was used to redeem the 2014 Notes and discharge our obligations in full. The Commitment under the PCA Credit Agreement is subject to an annual reduction of 2% of the commitments then in effect. The PCA Credit Agreement matures on the earlier of October 27, 2028, subject to springing maturity 91 days prior to the maturity of the 2020 Notes, if the outstanding principal amount of the 2020 Notes plus $50 million is less than our available borrowing liquidity and unrestricted cash.

We may prepay and reborrow any borrowings under the PCA Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except for the initial $150 million borrowing which may not be prepaid for one year and in certain other circumstances). In addition, we must make mandatory prepayments of principal under the PCA Credit Agreement upon the occurrence of certain asset sales. The PCA Credit Agreement contains certain customary representations, warranties, and affirmative and negative covenants of the Company. At December 31, 2023,

we were in compliance with the PCA Credit Agreement.

Under the PCA Credit Agreement, loans generally may bear interest based on SOFR or the administrative agent’s fixed rate, as applicable, plus, in each case, an applicable margin of 3.65% per annum. In the case of the initial $150 million borrowing, the Company has selected a one-year fixed rate loan that will bear interest at an all-in interest rate of 9.1%. We may receive patronage dividends under the PCA Credit Agreement. Patronage dividends are distributions of profits from banks in the farm credit system. Patronage dividends, which are generally made in cash, are accrued as earned and recorded as a reduction to interest expense.

The PCA Credit Agreement contains certain customary representations, warranties, and affirmative and negative covenants of us and our subsidiaries that restrict us and our subsidiaries’ ability to take certain actions, including, incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock and certain types of indebtedness, making certain investments, entering into certain transactions with affiliates or changing the nature of our business.

ABL CREDIT AGREEMENT

Our ABL Credit Agreement matures on November 7, 2027 and includes a $275 million revolving loan commitment, subject to borrowing base limitations based on a percentage of applicable eligible receivables and eligible inventory. Based upon our Consolidated Balance Sheets as of December 31, 2023, our eligible receivables and inventory supported up to $259 million availability under the line of which $20 million was outstanding and $3.7 million was utilized to issue letters of credit. We may, at our option, prepay any borrowings under the ABL Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances). Borrowings under the ABL Credit Agreement are also subject to mandatory prepayment in certain circumstances, including in the event that borrowings exceed applicable borrowing base limits. We may also increase commitments under the ABL Credit Agreement in an aggregate principal amount of up to $100 million, subject to obtaining commitments from any participating lenders and certain other conditions.

Under the ABL Credit Agreement, loans may bear interest based on SOFR (secured overnight financing rate) or an annual base rate, as applicable, plus, in each case, an applicable margin that is based on availability, as calculated under the ABL Credit Agreement that may vary from 1.25% per annum to 1.75% per annum in the case of SOFR loans and 0.25% per annum to 0.75% per annum in the case of annual base rate loans. In addition, a commitment fee based on unused availability is also payable which may vary from 0.25% per annum to 0.375% per annum.

The ABL Credit Agreement contains certain customary representations, warranties, and affirmative and negative covenants of us and our subsidiaries that restrict us and our subsidiaries' ability to take certain actions, including, incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, repurchase or redemption of capital stock and certain types of indebtedness, making certain investments, entering into certain transactions with affiliates or changing the nature of our business. The agreement also contains a financial covenant, which requires us to maintain a consolidated fixed charge coverage ratio of not less than 1.10x to 1.00x, provided that the financial covenant under the ABL Credit Agreement is only applicable during an event of default or if availability, as calculated under the ABL Credit Agreement, is at any time less than or equal to the greater of (i) 10% of the Line Cap and (ii) $19 million. As of December 31, 2023, our fixed charge coverage ratio was approximately 3.85x. Our ability to utilize our ABL Credit Agreement could be limited in the future by our bond indenture which have limitations on liens.

2020 NOTES

In 2020, we issued $275 million aggregate principal amount of senior notes (2020 Notes) due August 15, 2028 with an interest rate of 4.75%.

The 2020 Notes are unsecured and effectively subordinated to all of the Company’s existing and future secured debt, including borrowings under its existing credit facilities. The 2020 Notes are guaranteed on an unsecured basis by each of the Company’s existing direct and indirect domestic subsidiaries, and will be guaranteed by each of the Company’s future direct and indirect domestic subsidiaries, subject to certain exceptions. If the Company is unable to make payments on the 2020 Notes when they are due, each Guarantor is obligated to make such payments.

The Indenture contains covenants that, among other things, limit our ability and the ability of any of our subsidiaries to (i) enter into sale leaseback transactions, (ii) incur liens and (iii) consolidate, merge or sell all or substantially all of our assets. In addition, the Indenture requires, among other things, we provide certain reports to holders of the 2020 Notes. These covenants are subject to a number of exceptions, limitations and qualifications as set forth in the Indenture.

We may redeem all or a portion of the 2020 Notes at specified redemption prices plus accrued and unpaid interest. In addition, we may be required to make an offer to purchase the 2020 Notes upon the sale of certain assets and upon a change in control.

2014 NOTES

In 2014, we issued $300 million aggregate principal amount of senior notes (2014 Notes), due February 1, 2025, with an interest rate of 5.375%. As of December 31, 2023, these notes have been fully extinguished.

SCHEDULED PAYMENTS

As of December 31, 2023, our future maturities of long term debt over the next five years are $20 million due in 2027 and $425 million due 2028.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Section S99
-Paragraph 1
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 470
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

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