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Long-Term Debt
6 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Long-Term Debt

4. Long-Term Debt

Our long-term debt consists of the following: 

 

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(In Thousands)

 

Working Capital Revolver Loan, with a current interest

   rate of 3.75% (A)

 

$

 

 

$

 

Senior Secured Notes due 2023 (B)

 

 

435,000

 

 

 

435,000

 

Secured Financing due 2023, with an interest

   rate of 8.32% (C)

 

 

9,241

 

 

 

10,715

 

Secured Loan Agreement due 2025, with an interest

   rate of 8.75% (D)

 

 

6,156

 

 

 

6,834

 

Secured Financing due 2025, with an interest

   rate of 8.75% (E)

 

 

26,534

 

 

 

28,636

 

Unsecured Loan Agreement due 2022 (F)

 

 

 

 

 

10,000

 

Secured Promissory Note due 2021

 

 

 

 

 

1,221

 

Other

 

 

387

 

 

 

432

 

Unamortized discount, net of premium and debt issuance

  costs

 

 

(6,810

)

 

 

(8,648

)

 

 

 

470,508

 

 

 

484,190

 

Less current portion of long-term debt

 

 

9,049

 

 

 

16,801

 

Long-term debt due after one year, net

 

$

461,459

 

 

$

467,389

 

 

(A) Our revolving credit facility, as amended (the “Working Capital Revolver Loan”), provides for advances up to $65 million (the “Maximum Revolver Amount”), based on specific percentages of eligible accounts receivable and inventories and up to $10 million of letters of credit, the outstanding amount of which reduces the available for borrowing under the Working Capital Revolver Loan.  At June 30, 2021, our available borrowings under our Working Capital Revolver Loan were approximately $50.3 million, based on our eligible collateral, less outstanding letters of credit and loan balance.  The maturity date of the Working Capital Revolver Loan is on the earlier of (i) the date that is 90 days prior to the earliest stated maturity date of the Senior Secured Notes (unless refinanced or repaid) and (ii) February 26, 2024.  Subject to certain conditions and subject to lender approval, the Maximum Revolver Amount may increase up to an additional $10 million. The Working Capital Revolver Loan also provides for a springing financial covenant (the “Financial Covenant”), which requires that, if the borrowing availability is less than 10.0% of the total revolver commitments, then the borrowers must maintain a minimum fixed charge coverage ratio of not less than 1.00 to 1.00. The Financial Covenant, if triggered, is tested monthly.  

4. Long-Term Debt (continued)

(B) On April 25, 2018, LSB completed the issuance and sale of $400 million aggregate principal amount of its 9.625% Senior Secured Notes due 2023 (the “Notes”), pursuant to an indenture (the “Indenture”), dated as of April 25, 2018.  The Notes were issued at a price equal to 99.509% of their face value.  

On June 21, 2019, LSB completed the issuance and sale of $35 million aggregate principal amount of its 9.625% Senior Secured Notes due 2023 (the “New Notes”).  The New Notes were issued pursuant to the Indenture (the Notes together with the New Notes, the “Senior Secured Notes”).  The New Notes were issued at a price equal to 102.125% of their face value, plus accrued interest from May 1, 2019 to June 21, 2019.

The Senior Secured Notes mature on May 1, 2023.  Interest is to be paid semiannually in arrears on May 1st and November 1st.

(C) El Dorado Chemical Company (“EDC”), one of our subsidiaries, is party to a secured financing arrangement with an affiliate of LSB Funding L.L.C. (“LSB Funding”).  Principal and interest are payable in 48 equal monthly installments with a final balloon payment of approximately $3 million due in June 2023.

(D) EDC is party to a secured loan agreement with an affiliate of LSB Funding. Principal and interest are payable in 60 equal monthly installments through March 2025.

(E) In August 2020, El Dorado Ammonia L.L.C. (“EDA”), one of our subsidiaries, entered into a $30 million secured financing arrangement with an affiliate of LSB Funding. Beginning in September 2020, principal and interest are payable in 60 equal monthly installments with a final balloon payment of approximately $5 million due in August 2025. This financing arrangement is secured by an ammonia storage tank and is guaranteed by LSB.

(F) In April 2020, LSB entered into a federally guaranteed loan agreement (“PPP loan”) for $10 million with a lender pursuant to a new loan program through the U.S. Small Business Administration (“SBA”) as the result of the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and amended by the Paycheck Protection Program Flexibility Act of 2020.  We applied ASC 470, Debt, to account for the PPP loan. We have used all of the proceeds from the PPP loan for payroll, rent, utilities, and other specified costs that qualify for loan forgiveness.  In April 2021, we submitted the PPP loan forgiveness application to the lender.  In June 2021, the PPP loan was fully forgiven by the SBA and lender.  As a result, we recognized a gain on extinguishment of debt of $10 million for the three months ended June 30, 2021.