Pacific Ethanol Refinances $47.5 Million in Secured Promissory Notes
Source: GlobeNewswire Inc.
Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading producer and marketer of low-carbon renewable fuels in the United States, has refinanced $47.5 million in promissory notes related to its July 3, 2017 acquisition of Illinois Corn Processing (ICP). To repay the notes, the company used $6 million of cash on hand and $42 million in proceeds from new term and revolving debt financing with CoBank, ACB.
Neil Koehler, Pacific Ethanol’s president and CEO, stated: “With the acquisition of ICP in July 2017, we added our ninth production facility, bringing our combined annual production capacity to 605 million gallons and diversifying our sales with high quality beverage and industrial alcohol products. In conjunction with the acquisition, we stated our intention to quickly refinance the associated short-term promissory notes. With the CoBank term loan and revolving credit facility, we further strengthen our balance sheet with lower cost and longer-term debt.”
Financing Terms
Pacific Ethanol entered into two separate financing agreements with CoBank: a $24 million term debt financing and an $18 million revolving debt facility. The $24 million term debt facility matures in September 2021 and provides for quarterly amortizing principal payments of $1.5 million each beginning December 2017. The revolving debt facility matures in September 2022 and does not require amortizing principal payments. Principal repaid under the revolving debt facility may, subject to customary conditions, be reborrowed prior to maturity. The term and revolving debt facilities bear interest at a rate equal to the 30-day LIBOR, plus 3.75%.
