Hi ID. I believe you're right. I found the following notes in the last Q1 pertaining to the net interest expense:
"Interest expense, net increased $0.9 million to $4.4 million for the three months ended March 31, 2014 from $3.5 million for the same period in 2013. The $0.9 million increase in interest expense, net is primarily due to increased amortization of debt discount due to our early retirement of a significant amount of our senior unsecured notes. We used the proceeds from exercises during the quarter of certain of our outstanding warrants to retire the senior unsecured notes earlier than originally projected."
That would suggest the approach would first be to deduct the $0.9 payment from last Q, then add in the $2.3M payment from this Q. The result would read as $5.7M. Make sense?
Then the question remains as to how the overall interest expense otherwise changed. The following was entered regarding debt that might reflect on the interest expense:
Pg. 11-12
Plant Owners’ Term Debt and Operating Lines of Credit – The Plant Owners’ debt as of March 31, 2014 consisted of a $32,487,000 tranche A-1 term loan and a $26,279,000 tranche A-2 term loan. Pacific Ethanol, Inc., holds a combined $27,088,000 of these term loans, which are eliminated in consolidation. The Plant Owners’ availability under their revolving lines of credit was $50,378,000, which was subsequently reduced to $35,000,000, as discussed below. The term debt requires monthly interest payments at a floating rate equal to the three-month LIBOR or the Prime Rate of interest, at the Plant Owners’ election, plus 10.0%. The revolving credit facilities require monthly interest payments at a floating rate equal to the three-month LIBOR or the Prime Rate of interest, at the Plant Owners’ election, plus 10.0% and 4.5% for the $20,000,000 and $15,000,000 facilities, respectively. At March 31, 2014, the average interest rate was approximately 11.0%. Repayments of principal are based on available free cash flow of the Plant Owners, until maturity, when all principal amounts are due.
For the three months ended March 31, 2014, the Company paid in cash $19,378,000 on its revolving credit facilities. As of April 25, 2014, the outstanding principal balance on these revolving credit facilities was fully repaid, with an aggregate of $35,000,000 of availability.
Debt Modifications – On April 1, 2014, the Company entered into amendments to its credit facilities and term loan arrangements to achieve the following changes:
· Adjust the terms of the credit agreements to take into account a restart of the Company’s Madera, California facility;
· Reduce the Company’s revolving credit facility from $35,000,000 to $20,000,000 while increasing the maximum amount of the term loan outstanding to $65,766,000, allowing the Company to immediately borrow an additional $7,000,000. The additional $7,000,000 in borrowings was subject to an original issue discount of 6.25%, representing loan fees payable to the lenders, resulting in net proceeds from the additional borrowings of approximately $6,600,000. The Company intends to use the net proceeds of the additional loan for transaction expenses and expenses associated with restarting operations at the Company’s Madera, California facility;
· Increase to $24,000,000 from $14,000,000 the level of permitted indebtedness, including capital lease liabilities that may be incurred for yield enhancing equipment or processing and separation equipment for corn oil and corn syrup at the Company’s ethanol production facilities; and
· Maintain the Company’s new revolving credit facility at $15,000,000 but allow the Company to terminate in whole or permanently reduce in part in $1,000,000 increments the lenders’ aggregate commitment.
Pg 17
Payments on Plant Owners’ Revolving Credit Facility – From April 1, 2014 through April 25, 2014, the Company made $16,000,000 in principal payments on its revolving lines of credit. As of May 9, 2014, the outstanding principal balance on these revolving lines of credit was $0, with $35,000,000 of availability.
Debt Modifications – On April 1, 2014, the Company entered into amendments to its credit facilities and term loan arrangements as discussed in detail in Note 5.
Pg 30
The Plant Owners’ debt as of March 31, 2014 consisted of a $32.5 million tranche A-1 term loan and a $26.3 million tranche A-2 term loan. Pacific Ethanol, Inc. holds $27.1 million of these term loans, which are eliminated in consolidation. The Plant Owners’ availability under their revolving lines of credit was $50.4 million, which was subsequently reduced to $35.0 million. The term debt requires monthly interest payments at a floating rate equal to the three-month LIBOR or the Prime Rate of interest, at the Plant Owners’ election, plus 10.0%. The revolving credit facilities require monthly interest payments at a floating rate equal to the three-month LIBOR or the Prime Rate of interest, at the Plant Owners’ election, plus 10.0% and 4.5% for the $20.0 million and $15.0 million facilities, respectively. At March 31, 2014, the average interest rate was approximately 11.00%. Repayments of principal are based on available free cash flow of the Plant Owners, until maturity, when all principal amounts are due.
Since April 1, 2014, we made $16.0 million in principal payments in cash under the revolving credit facility, resulting in an outstanding balance of $0 million as of April 25, 2014, with aggregate borrowing availability of $35.0 million.
All of the term loans and revolving credit facilities represent permanent financing and are secured by a perfected, first-priority security interest in all of the assets, including inventories and all rights, title and interest in all tangible and intangible assets, of the Plant Owners. The Plant Owners’ creditors do not have recourse to Pacific Ethanol, Inc.
also
As of March 31, 2014, the aggregate outstanding principal balance of the January 2013 Notes was $1.0 million. As of the filing of this report, we have fully repaid the remaining principal balance on these notes.
Do I really want to try to sort that all out? Ugg! :/
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