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Credit Facilities
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9 Months Ended |
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Sep. 30, 2014
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| Debt Disclosure [Abstract] | |
| CREDIT FACILITIES |
CREDIT FACILITIES
On December 20, 2012, Pinedale LP closed on a $70 million secured term credit facility with KeyBank serving as a lender and as administrative agent on behalf of other lenders participating in the credit facility. Funding of the credit facility was conditioned on our contribution to Pinedale LP of the proceeds of a related stock issuance financing a portion of the acquisition cost of the Pinedale LGS and the receipt by Pinedale LP of the related $30 million co-investment funds from Prudential. Outstanding balances under the credit facility will generally accrue interest at a variable annual rate equal to LIBOR plus 3.25 percent (3.40 percent as of September 30, 2014). The credit facility will remain in effect through December 2015, with an option to extend through December 2016. Principal payments totaling $2.9 million and $3.5 million are required during the years 2014 and 2015, respectively. The credit facility is secured by the Pinedale LGS. Pinedale LP is obligated to pay all accrued interest monthly and is further obligated to make monthly principal payments, which began March 7, 2014, in the amount of $294 thousand or 0.42 percent of the principal balance as of March 1, 2014. The credit agreement contains, among other restrictions, specific financial covenants including the maintenance of certain financial coverage ratios and a minimum net worth requirement. Additionally, the registrant has provided to KeyBank a guarantee against certain inappropriate conduct by or on behalf of Pinedale LP or us. Pinedale LP is required to maintain a restricted collateral account into which Ultra Wyoming makes all lease payments under the Pinedale Lease Agreement. Payments of principal and interest pursuant to the credit facility are drawn by KeyBank directly from the restricted collateral account prior to transferring the remaining cash to the Pinedale LP operating account. The balance in the restricted collateral account at September 30, 2014 was $0. As of September 30, 2014, Pinedale LP was in compliance with all of the financial covenants of the secured term credit facility.
Pinedale LP's credit facility with KeyBank limits distributions by Pinedale LP to the Company. Now that the Company has qualified as a REIT under the Code, 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 to KeyBank have not been accelerated following an Event of Default (as defined in the credit facility). The KeyBank 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.
As of September 30, 2014 and December 31, 2013 approximately $630 thousand and $1.0 million, respectively, in net deferred debt issuance costs related to the KeyBank credit facility are included in the accompanying Consolidated Balance Sheets. The deferred costs will be amortized over the anticipated three-year term of the KeyBank credit facility. For the three months ended September 30, 2014 and 2013, $129 thousand is included in interest expense within the accompanying Consolidated Statements of Income. For the nine months ended September 30, 2014 and 2013, $387 thousand and $385 thousand, respectively, are included in interest expense within the accompanying Consolidated Statements of Income.
We have executed interest rate swap derivatives to add stability to our interest expense and to manage our exposure to interest rate movements on our LIBOR based borrowings. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. See Note 14 for further information regarding interest rate swap derivatives.
On May 8, 2013, the Company entered into a $20 million revolving line of credit with KeyBank. The primary term of the facility was three years with the option for a one-year extension. Outstanding balances under the revolving credit facility (the "KeyBank Revolver") accrued interest at a variable annual rate equal to LIBOR plus 4.0 percent or the Prime Rate plus 2.75 percent. The facility was for the purpose of funding general working capital needs and if necessary, to provide short-term financing for the acquisition of additional real property assets. The amount available to be drawn under this facility was subject to a borrowing base limitation. As of September 30, 2014 , there had been no borrowings against the KeyBank Revolver. The agreement was terminated on September 26, 2014.
As of September 30, 2014 and December 31, 2013, approximately $0 and $208 thousand, respectively, in net deferred debt issuance costs, related to the KeyBank Revolver, are included in the accompanying Consolidated Balance Sheets. The deferred costs were initially amortized over the anticipated four-year term of the KeyBank Revolver facility. For the three months ended September 30, 2014 and 2013, approximately $16 thousand and $0, respectively, is included in interest expense within the accompanying Consolidated Statements of Income. For the nine months ended September 30, 2014 and 2013, approximately $47 thousand and $0, respectively, is included in interest expense within the accompanying Consolidated Statements of Income. Upon termination, the remaining unamortized deferred debt issuance costs totaling approximately $161 thousand were expensed in full.
On September 26, 2014 the company entered into a $30 million revolving credit facility (the "Regions Revolver") with Regions Bank. The credit facility has a maturity of September 26, 2018. For the first six months the facility will bear interest on the outstanding balance at a rate of LIBOR plus 4.00 percent. On March 26, 2015 the interest rate will be determined by a grid anticipated to be LIBOR plus 3.25 percent to 4.00 percent. As of September 30, 2014 and December 31, 2013 approximately, $452 thousand and $0, respectively, in net deferred debt issuance costs related to the Regions Bank credit facility are included in the accompanying Consolidated Balance Sheets. For the three and nine months ended September 30, 2014 and 2013, approximately $0, is included in interest expense within the accompanying Consolidated Statements of Income. As of September 30, 2014, there had been no borrowings against the Regions Revolver.
On October 29, 2010, Mowood entered into a Revolving Note Payable Agreement (“2010 Note Payable Agreement”) with a financial institution with a maximum borrowing base of $1.3 million. Borrowings on the 2010 Note Payable Agreement, as amended and restated, were secured by all of Mowood’s assets. Interest accrued at LIBOR, plus 4 percent, was payable monthly, with all outstanding principal and accrued interest payable on the termination date of October 29, 2013.
On October 15, 2013, Mowood entered into a Revolving Note Payable Agreement (“2013 Note Payable Agreement”) with a financial institution with a maximum borrowing base of $1.5 million. Borrowings on the 2013 Note Payable Agreement are secured by Mowood’s assets. Interest accrues at Prime Lending Rate as published in the Wall Street Journal, plus 0.5 percent (3.75 percent as of September 30, 2014), is payable monthly, with all outstanding principal and accrued interest payable on the termination date of October 15, 2014. As of September 30, 2014 there was $0 in outstanding borrowings under this 2013 Note Payable Agreement. The 2013 Note Payable Agreement contains various restrictive covenants, with the most significant relating to minimum consolidated fixed charge ratio, the incidence of additional indebtedness, member distributions, extension of guaranties, future investments in other subsidiaries and change in ownership. Mowood was in compliance with the various covenants of the 2013 Note Payable Agreement as of September 30, 2014. For additional information, see Note 17 of the Notes to the Consolidated Financial Statements.
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