CorEnergy Infrastructure Trust, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Credit Facilities

Credit Facilities

9 Months Ended

Sep. 30, 2016

The following is a summary of our senior notes payable and other debt as of September 30, 2016, and December 31, 2015:



	Total Commitment or Original Principal		Quarterly Principal Payments			September 30, 2016				December 31, 2015
	Total Commitment or Original Principal		Quarterly Principal Payments		Maturity Date	Amount Outstanding		Interest Rate		Amount Outstanding		Interest Rate
7% Unsecured Convertible Senior Notes	$	115,000,000	$	—	6/15/2020	$	114,000,000	7.00	%	$	115,000,000	7.00	%
Regions Secured Credit Facilities:
Regions Revolver	$	105,000,000	$	—	12/15/2019	44,000,000		3.80	%	—		3.07	%
Regions Term Loan	$	45,000,000	$	1,615,000	12/15/2019	38,355,000		3.78	%	43,200,000		3.07	%
MoGas Revolver	$	3,000,000	$	—	12/15/2019	—		3.78	%	—		3.07	%
Omega Line of Credit	$	1,500,000	$	—	7/31/2017	—		4.53	%	—		4.43	%
Pinedale Secured Credit Facility:
$70M Term Loan	$	70,000,000	$	—	3/30/2016	—		—		62,532,000		4.67	%
$58.5M Term Loan – related party ⁽¹⁾	$	11,085,750	$	167,139	3/30/2021	9,574,465		8.00	%	—		—
Total Debt						$	205,929,465			$	220,732,000
Less:
Unamortized deferred financing costs ⁽²⁾						$	412,086			$	510,401
Unamortized discount on 7% Convertible Senior Notes						2,770,894				3,356,847
Long-term debt, net of deferred financing costs						$	202,746,485			$	216,864,752
Debt due within one year						$	7,128,556			$	66,132,000
(1) $47,414,250 of the $58.5 million term loan is payable to CorEnergy under the same terms, and eliminates in consolidation.
(2) A portion of the unamortized deferred financing costs, related to our revolving credit facilities, are included in Deferred Costs in the Assets section of the Consolidated Balance Sheets. See the next table for deferred financing costs included in the Asset section of the Consolidated Balance Sheets.



Deferred Financing Costs, net ⁽¹⁾
	September 30, 2016		December 31, 2015
Regions Credit Facilities	$	2,422,105	$	2,975,476
Pinedale Credit Facility	—		156,330
Total Deferred Debt Costs, net	$	2,422,105	$	3,131,806
(1) This is the portion of deferred financing costs which relate to a revolving credit facility and are not presented as a reduction to Long-term debt but rather as Deferred Costs in the Asset section of the Consolidated Balance Sheets.



Deferred Financing Cost Amortization Expense⁽¹⁾⁽²⁾
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Regions Credit Facilities	$	272,074	$	368,486	$	806,452	$	723,694
Pinedale Credit Facility	—		129,216		156,330		387,648
Total Deferred Debt Cost Amortization	$	272,074	$	497,702	$	962,782	$	1,111,342
(1) Amortization of deferred debt issuance costs is included in interest expense in the Consolidated Statements of Income.
(2) For the amount of deferred debt costs amortization relating to the Convertible Notes included in the Consolidated Statements of Income, see the Convertible Debt footnote.

The remaining contractual principal payments as of September 30, 2016, under our Regions and Pinedale credit facilities are as follows:



Total Remaining Contractual Payments
Year	Regions Revolver		Regions Term Loan		Pinedale Credit Facility		Total
2016	$	—	$	1,615,000	$	167,139	$	1,782,139
2017	—		6,460,000		668,556		7,128,556
2018	—		6,460,000		668,556		7,128,556
2019	44,000,000		23,820,000		668,556		68,488,556
2020	—		—		668,556		668,556
Thereafter	—		—		6,733,102		6,733,102
Total	$	44,000,000	$	38,355,000	$	9,574,465	$	91,929,465

Regions Credit Facilities

On March 30, 2016, the Company drew $44.0 million on the Regions Revolver in conjunction with the refinancing of the Pinedale Credit Facility. See below for further details. As of September 30, 2016, the Company has approximately $53.3 million of available borrowing base capacity on the Regions Revolver.

Pinedale Credit Facility

On December 20, 2012, Pinedale LP closed on a $70 million secured term credit facility. Outstanding balances under the original facility generally accrued interest at a variable annual rate equal to LIBOR plus 3.25 percent. This credit facility was secured by the Pinedale LGS asset. Under the original agreement, Pinedale LP was obligated to pay all accrued interest monthly and was further obligated to make monthly principal payments, which began on March 7, 2014, in the amount of $294 thousand or 0.42 percent of the principal balance as of March 1, 2014.

The credit facility remained in effect until December 31, 2015, with an option to extend through December 31, 2016. Although the Company elected not to extend the facility for an additional one-year period it did amend the facility to extend the maturity date to March 30, 2016. During the extension period, the company made principal payments of $3.2 million and the credit facility bore interest on the outstanding principal amount at LIBOR plus 4.25 percent.

On March 4, 2016, the Company obtained a consent from its lenders under the Regions Credit Facility, which permitted the Company to utilize the Regions Revolving Credit Facility to refinance the Company's pro rata share of the remaining balance of the Pinedale secured term credit facility. On March 30, 2016, the Company and Prudential ("the Refinancing Lenders"), refinanced the remaining $58.5 million principal balance of the $70 million credit facility (on a pro rata basis equal to their respective equity interests in Pinedale LP, with the Company’s 81.05 percent share being approximately $47.4 million) and executed a series of agreements assigning the credit facility to CorEnergy Infrastructure Trust, Inc. as Agent for the Refinancing Lenders. The facility was further modified to extend the maturity date to March 30, 2021; to increase the LIBOR Rate to the greater of (i) 1.00 percent and (ii) the one-month LIBOR rate; and to increase the LIBOR Rate Spread to seven percent (7.00 percent) per annum. The Company's portion of the debt and interest is eliminated in consolidation and Prudential's portion of the debt is shown as a related-party liability. The Company also terminated one of two related interest rate swaps with a notional amount of $26.3 million.

The Company has provided to Prudential a guarantee against certain inappropriate conduct by or on behalf of Pinedale LP or us. The credit agreement contains, among other restrictions, specific financial covenants including the maintenance of certain financial coverage ratios and a minimum net worth requirement. Pinedale LP was in compliance with all covenants under the Pinedale Credit Facility as of September 30, 2016.

Pinedale LP's credit facility with the Refinancing Lenders requires all lease payments by Ultra Wyoming to be made to a lock box account under the control of the company as Agent and limits distributions by Pinedale LP to the Company. Distributions by Pinedale LP to the Company are permitted to the extent required for the Company to maintain its REIT qualification, so long as Pinedale LP's obligations under the credit facility have not been accelerated following an Event of Default (as defined in the credit facility). However, Pinedale LP automatically entered into a Cash Control Period (as defined in the credit facility) with the Refinancing Lenders upon the April 29, 2016, bankruptcy filing by Ultra Wyoming and its parent guarantor, Ultra Petroleum. During a Cash Control Period, the Company as Agent may (and, upon the request of any lender, shall) sweep all funds for the repayment of accrued interest, scheduled principal payments and principal prepayments on the loans, in all cases to the extent of such available funds, until such time as the Cash Control Period has terminated or the Ultra Lease has been affirmed by Ultra Wyoming in a lawful bankruptcy proceeding. For the three and nine months ended September 30, 2016, pursuant to these additional cash sweep provisions, an additional $3.1 million and $6.2 million, respectively, was distributed (pro rata, based on ownership percentages) to the Refinancing Lenders as a reduction to the outstanding principal. The credit facility also requires that Pinedale LP maintain minimum net worth levels and certain leverage ratios, which along with other provisions of the credit facility limit cash dividends and loans to the Company. At September 30, 2016, the net assets of Pinedale LP were $142.6 million and Pinedale LP was in compliance with all of the financial covenants of the secured term credit facility.