Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.8.0.1
Debt
3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
DEBT
DEBT
The following is a summary of the Company's debt facilities and balances as of March 31, 2018 and December 31, 2017:
 
Total Commitment
 or Original Principal
 
Quarterly Principal Payments
 
 
 
March 31, 2018
 
December 31, 2017
 
 
 
Maturity
Date
 
Amount Outstanding
 
Interest
Rate
 
Amount Outstanding
 
Interest
Rate
CorEnergy Secured Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
CorEnergy Revolver
$
160,000,000

 
$

 
7/28/2022
 
$

 
4.63
%
 
$

 
4.32
%
MoGas Revolver
1,000,000

 

 
7/28/2022
 

 
4.63
%
 

 
4.32
%
Omega Line of Credit
1,500,000

 

 
7/31/2018
 

 
5.88
%
 

 
5.57
%
Pinedale Secured Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amended Pinedale Term Credit Facility
41,000,000

 
882,000

 
12/29/2022
 
40,118,000

 
6.50
%
 
41,000,000

 
6.50
%
7.00% Unsecured Convertible Senior Notes
115,000,000

 

 
6/15/2020
 
114,000,000

 
7.00
%
 
114,000,000

 
7.00
%
Total Debt
 
$
154,118,000

 
 
 
$
155,000,000

 
 
Less:
 
 
 
 
 
 
 
 
Unamortized deferred financing costs (1)
 
$
359,101

 
 
 
$
375,309

 
 
Unamortized discount on 7.00% Convertible Senior Notes
 
1,662,526

 
 
 
1,847,254

 
 
Long-term debt, net of deferred financing costs
 
$
152,096,373

 
 
 
$
152,777,437

 
 
Debt due within one year
 
$
3,528,000

 
 
 
$
3,528,000

 
 
(1) Unamortized deferred financing costs related to our revolving credit facilities are included in Deferred Costs in the Assets section of the Consolidated Balance Sheets. Refer to the "Deferred Financing Costs" paragraph below.

CorEnergy Credit Facility
On July 28, 2017, the Company entered into an amendment and restatement of the CorEnergy Credit Facility with Regions Bank (as lender and administrative agent for other participating lenders). The amended facility provides for borrowing commitments of up to $161.0 million, consisting of (i) $160.0 million on the CorEnergy Revolver, subject to borrowing base limitations, and (ii) $1.0 million on the MoGas Revolver.
The amended facility has a 5-year term maturing on July 28, 2022, and provides for a springing maturity on February 28, 2020, and thereafter, if the Company fails to meet certain liquidity requirements from the springing maturity date through the maturity of the Company's convertible notes on June 15, 2020. Borrowings under the credit facility will generally bear interest on the outstanding principal amount using a LIBOR pricing grid that is expected to equal a LIBOR rate plus an applicable margin of 2.75 percent to 3.75 percent, based on the Company's senior secured recourse leverage ratio. Total availability is subject to a borrowing base. The CorEnergy Credit Facility contains, among other restrictions, certain financial covenants including the maintenance of certain financial ratios, as well as default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods). As of March 31, 2018, the Company was in compliance with all covenants of the CorEnergy Credit Facility.
As of March 31, 2018, the Company had approximately $141.8 million and $1.0 million of availability under the CorEnergy Revolver and MoGas Revolver, respectively.
Pinedale Credit Facility
On December 20, 2012, Pinedale LP closed on a $70.0 million secured term credit facility. On March 4, 2016, the Company obtained a consent from its lenders under the CorEnergy Credit Facility, which permitted the Company to utilize the CorEnergy 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 (collectively, "the Refinancing Lenders"), refinanced the remaining $58.5 million principal balance of the $70.0 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 7.00 percent per annum.
On December 29, 2017, Pinedale LP entered into the Amended Pinedale Term Credit Facility with Prudential and a group of lenders affiliated with Prudential as the sole lenders and Prudential serving as administrative agent. Under the terms of the Amended Pinedale Term Credit Facility, Pinedale LP was provided with a 5-year $41.0 million term loan facility, bearing interest at a fixed rate of 6.5 percent, which matures on December 29, 2022. Principal payments of $294 thousand, plus accrued interest, are payable monthly. The Amended Pinedale Term Credit Facility was utilized to pay off the balance due to the Refinancing Lenders under the previously existing Pinedale LP credit facility.
Outstanding balances under the facility are secured by the Pinedale LGS assets. The Amended Pinedale Term Credit Facility contains, among other restrictions, specific financial covenants including the maintenance of certain financial coverage ratios and a minimum net worth requirement which, along with other provisions of the credit facility, limit cash dividends and loans by Pinedale LP to the Company. At March 31, 2018, the net assets of Pinedale LP were $140.6 million and Pinedale LP was in compliance with all of the financial covenants of the Amended Pinedale Term Credit Facility.
Deferred Financing Costs
A summary of deferred financing cost amortization expenses for the three months ended March 31, 2018 and 2017 is as follows:
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
CorEnergy Credit Facility
$
143,635

 
$
272,074

Pinedale Credit Facility
13,112

 

Total Deferred Debt Cost Amortization Expense (1)(2)
$
156,747

 
$
272,074

(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 cost amortization relating to the Convertible Notes included in the Consolidated Statements of Income, refer to the Convertible Note Interest Expense table below.

CorEnergy Credit Facilities
Prior to the July 28, 2017 amendment and restatement, previously existing deferred financing costs related to the CorEnergy Credit Facility were approximately $1.8 million, of which approximately $1.6 million continue to be deferred and amortized under the amended and restated facility. Additionally, the Company incurred approximately $1.3 million in new debt issuance costs which have been deferred and are being amortized over the term of the new facility. Total deferred financing costs of $2.9 million are being amortized on a straight-line basis over the 5-year term of the amended and restated CorEnergy Credit Facility.
Amended Pinedale Term Credit Facility
In connection with entering into the Amended Pinedale Term Credit Facility, Pinedale LP incurred approximately $367 thousand in new debt issuance costs, of which $264 thousand were deferred and are being amortized on a straight-line basis over the 5-year term of the Amended Pinedale Term Credit Facility.
Contractual Payments
The remaining contractual principal payments as of March 31, 2018 under the Pinedale credit facility are as follows:
Year
 
Pinedale Credit Facility
2018
 
$
2,646,000

2019
 
3,528,000

2020
 
3,528,000

2021
 
3,528,000

2022
 
26,888,000

Thereafter
 

Total Remaining Contractual Payments
 
$
40,118,000


Convertible Debt
On June 29, 2015, the Company completed a public offering of $115.0 million aggregate principal amount of 7.00% Convertible Senior Notes Due 2020 (the "Convertible Notes"). The Convertible Notes mature on June 15, 2020 and bear interest at a rate of 7.00 percent per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015. On May 23, 2016, the Company repurchased $1.0 million of its convertible bonds on the open market.
The following is a summary of the impact of Convertible Notes on interest expense for the three months ended March 31, 2018 and 2017:
Convertible Note Interest Expense
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
7.00% Convertible Notes
$
1,995,000

 
$
1,995,000

Discount Amortization
184,728

 
184,728

Deferred Debt Issuance Amortization
12,069

 
12,069

Total Convertible Note Interest Expense
$
2,191,797

 
$
2,191,797


The Convertible Notes were initially issued with an underwriters' discount of $3.7 million which is being amortized over the life of the Convertible Notes. Including the impact of the convertible debt discount and related deferred debt issuance costs, the effective interest rate on the Convertible Notes is approximately 7.7 percent for each of the three months ended March 31, 2018 and 2017.