Southwest Iowa Renewable Energy inks $66 million credit agreement

By Toni Weeks

San Luis Obispo, Calif., July 1 – Southwest Iowa Renewable Energy, LLC negotiated a $66 million senior credit agreement with Farm Credit Services of America and CoBank on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility, which matures in 2023, is comprised of a $30 million term loan and a $36 million revolving term loan.

Interest on the loans dropped to Libor plus 335 basis points, the filing said.

Proceeds were used to refinance senior bank debt that was scheduled to mature in August.

The company also said it completed $26.2 million of subordinated term loan notes due 2023 at Libor plus 625 bps.

Proceeds of the notes were used to refinance the remaining balance of outstanding subordinated debt, which was scheduled to mature in August.

Southwest Iowa also paid a total of $26.8 million to its subordinated lenders.

“These agreements reduce our interest expense, reduce our debt service payments and solidify our credit availability for the next five years,” president and chief executive officer Brian Cahill said in a press release. “Our ability to pay down over half of our subdebt combines with our March 31, 2014 book value per unit of $5,447 to provide a dramatically stronger balance sheet for our investors. We have paid off more than $57 million in debt this year.”

Southwest Energy is an ethanol producer based in Council Bluffs, Iowa.

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