Note 8 - Debt

9 Months Ended

Sep. 30, 2017

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)

DEBT

As of the indicated dates, the Partnership had the following long-term debt outstanding (in thousands):

	September 30,			December 31,
	2017			2016
Long-Term Debt
Revolving Credit Facility (due 2020) (1)	$	1,800		$	8,150
2015 Bridge Loan		-			2,835
2010 Term Loan (due 2020)		-			3,762
2015 6-Year Term Loan (due 2021)		3,062			3,792
2015 20-Year Term Loan (due 2035)		4,673			4,936
Other		-			7
Total principal amount of long-term debt		9,535			23,482
Less: unamortized debt issuance costs		(114	)		(163	)
Total long-term debt, net of unamortized loan fees		9,421			23,319
Less: current portion of long-term debt, net		(988	)		(13,155	)
Long-Term Debt, net of associated unamortized loan fees	$	8,433		$	10,164

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)

July 13, 2017,

the maturity date was extended to

July 15, 2020.

The following table summarizes the Partnership

’s principal maturities of its debt (in thousands):

	Payments Due by Period
	Total		2017 (1)		2018		2019		2020		2021		Remaining
Debt	$	9,535	$	146	$	1,138	$	1,138	$	2,938	$	555	$	3,620

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)

For remainder of

2017

Credit Agreement with AgCredit PCA

March

27,

2015,

the Partnership and each of its wholly-owned subsidiaries, RHR (through

June 2016),

Royal and RHS, as the borrowers, and American AgCredit, PCA (“AgCredit PCA”), as lender and as agent for such other persons who

may

be added as lenders from time to time, entered into an Amended and Restated Credit Agreement that amended and restated the terms of the Partnership’s outstanding borrowings with AgCredit PCA (as it

may

be further amended, restated, modified or supplemented from time to time, the “PCA Credit Agreement”).

July 13, 2017,

the Partnership, Royal and RHS entered into the Seventh Amendment to Amended and Restated Credit Agreement (the “Seventh PCA Credit Agreement Amendment”) with AgCredit PCA. As a

result, the PCA Credit Agreement was amended to (i) delete references to certain loans that were paid in full in

May 2017, (

ii) extend the maturity date of the Revolving Credit Facility (as defined below) by

three

years, and (iii) revise certain financial covenants in connection with the

three

-year extension, all of which was described in greater detail in a Current Report on Form

-K filed by the Company on

July 17, 2017,

and as a subsequent event in the Company’s Quarterly Report on Form

-Q for the quarter ended

June 30, 2017.

Set forth below is a summary of the borrowings provided for by the PCA Credit Agreement:

Revolving Credit Facility.

The PCA Credit Agreement provides for a

million revolving credit facility (the “Revolving Credit Facility”). As a result of the Seventh PCA Credit Agreement Amendment, the maturity date was extended from

July 15, 2017

July 15, 2020.

Advances under the Revolving Credit Facility bear interest based on an election made by the Partnership at the time of the advance at either LIBOR rates or at the base rate of the higher of (a)

one

-half of

one

percent (

0.50%

) per annum in excess of the latest Federal Funds Rate (as defined in the PCA Credit Agreement); and (b) the prime rate of interest in effect for such day as published from time to time in

The Wall Street Journal

. The Partnership is required to pay a fee of

0.375%

per annum on the daily unused portion of the Revolving Credit Facility. The interest rate on the Revolving Credit Facility at

September 30, 2017,

was

5.25%

per annum.

As of

September 30, 2017

and

December 31, 2016,

the outstanding balance on the Revolving Credit Facility was

$1.8

million and

$8.15

million, respectively.

2010

Term Loan.

The PCA Credit Agreement governed a

2010

term loan of

$10.5

million, which was scheduled to mature on

July

2020

(the

“2010

Term Loan”). The

2010

Term Loan bore interest at a fixed rate of

6.5%

per annum until

March

27,

2015.

Since that date the interest rate has been

6.0%

per annum. The

2010

Term Loan was repaid in full in

May 2017.

As of

December 31, 2016,

the outstanding balance on the

2010

Term Loan was

$3.762

million.

2015

-Year Term Loan.

The PCA Credit Agreement provides for a

six

-year term loan of

$5.25

million, which matures on

March

27,

2021

(the

“2015

-Year Term Loan”). The

2015

-Year Term Loan bears interest at a fixed rate of

4.01%

per annum. The Partnership used the proceeds of the

2015

-Year Term Loan to replace working capital used to construct Phase

of the Partnership’s drying plant and to finance the construction of Phase

of its drying plant. As of

September 30, 2017

and

December 31, 2016,

the outstanding balance on the

2015

-Year Term Loan was

$3.062

million and

$3.792

million, respectively.

2015

Bridge Loan.

In connection with the

June 2015

acquisition by the Partnership of

736

acres of land, including improvements,

641

acres of macadamia nut trees, and windbreak trees (the “Becker Property Acquisition”), the PCA Credit Agreement was amended to provide for a bridge loan of

$2.835

million (the

“2015

Bridge Loan”), which was to mature on the earlier of (a)

July

15,

2017,

or (b) the date that the Partnership or any of its wholly-owned subsidiaries receives net proceeds from any issuance of equity, subject to certain exceptions. The

2015

Bridge Loan originally bore interest at the base rate plus

three

quarters of

one

percent (

0.75%

) where the base rate (“Base Rate”) is the higher of (i)

one

half of

one

percent (

0.5%

) per annum in excess of the latest Federal Funds Rate, and (ii) the prime rate of interest in effect for such day as published from time to time in

The Wall Street Journal

. As of

September 1, 2016,

the interest rate on the

2015

Bridge Loan increased to the Base Rate plus

1.00%.

As of

April

15,

2017,

the interest rate on the

2015

Bridge Loan increased to the Base Rate plus

1.25%.

The proceeds of the

2015

Bridge Loan were used by the Partnership on

June

16,

2015,

for the Becker Property Acquisition. The

2015

Bridge Loan was repaid in full in

May 2017.

The borrowings pursuant to the PCA Credit Agreement are collateralized by all of the personal and real property assets of the Borrowers,

including a

second

priority interest in the properties acquired in the Becker Property Acquisition. The PCA Credit Agreement contains certain restrictions associated with partner distributions, further indebtedness, sales of assets, and maintenance of certain financial covenants.

Credit Agreement with AgCredit FLCA

lso in connection with the Becker Property Acquisition, the Partnership entered into a Credit Agreement, effective

June 15, 2015 (

as it

may

be amended, restated, modified or supplemented from time to time, the “FLCA Credit Agreement”), with American AgCredit, FLCA (“AgCredit FLCA”), providing for a

$5.265

million

-year term loan that matures on

July

2035

(

“2015

-Year Term Loan”). The

2015

-Year Term Loan bears interest at a fixed rate of

5.29%

per annum and requires quarterly payments, with fixed principal reductions, over the term. The FLCA Credit Agreement requires the maintenance of certain financial covenants, including a covenant requiring the Total Indebtedness to Consolidated EBITDA Ratio (as defined in the FLCA Credit Agreement)

not

to exceed

4.0

1.0

as of the last day of each calendar quarter commencing with the calendar quarter ending

September 30, 2017.

The Partnership used the proceeds of the

2015

-Year Term Loan for the Becker Property Acquisition. The

2015

-Year Term Loan is secured by a mortgage on the properties acquired in the Becker Property Acquisition. As of

September 30, 2017

and

December 31, 2016,

the outstanding balance on the

2015

-Year Term Loan was

$4.673

million and

$4.936

million, respectively.

ROYAL HAWAIIAN ORCHARDS, L.P. 10-Q