Debt

Borrowing Arrangements

On April 13, 2017, the Company amended its line of credit agreement with a syndicate of banks. The amended agreement provides for a credit facility in the amount of $800 million. The Company can designate up to $400 million of borrowings as long-term when the debt is used for long-term purposes, such as replacing long-term debt that is maturing, funding the purchase of long-term assets, or increasing permanent working capital when needed. It also provides the Company with up to $90 million in letters of credit. Any amounts outstanding on letters of credit will reduce the amount available on the lines of credit. The Company had standby letters of credit outstanding of $32.5 million at December 31, 2017. As of December 31, 2017, the Company had $122.0 million of outstanding borrowings on the lines of credit of which $22.0 million is classified as short-term debt. Borrowings under the lines of credit bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date for the line of credit is April 2022. Draw downs and repayments that are less than 90 days are recorded on a net basis in the Consolidated Statements of Cash Flows.

The Company also has a line of credit related to The Andersons Denison Ethanol LLC ("TADE"), a consolidated subsidiary. TADE amended its borrowing arrangement with a syndicate of financial institutions in the fourth quarter of 2017 which provided a $15.0 million long-term line of credit. TADE had no outstanding borrowings under this line of credit as of December 31, 2017. Borrowings under the lines of credit and the term loan bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. The maturity date is July 1, 2021 for the long-term line of credit. TADE was in compliance with all financial and non-financial covenants as of December 31, 2017, including but not limited to minimum working capital and net worth. TADE debt is collateralized by the mortgage on the ethanol facility and related equipment or other assets and is not guaranteed by the Company, therefore it is considered non-recourse debt.

The Company’s short-term and long-term debt at December 31, 2017 and 2016 consisted of the following:



	December 31,
(in thousands)	2017		2016
Short-term debt - non-recourse	$	—	$	—
Short-term debt - recourse	22,000		29,000
Total short-term debt	$	22,000	$	29,000
Current maturities of long-term debt – non-recourse	$	—	$	—
Current maturities of long-term debt – recourse	54,205		47,545
Total current maturities of long-term debt	$	54,205	$	47,545
Long-term debt, less current maturities – non-recourse	$	—	$	—
Long-term debt, less current maturities – recourse	418,339		397,065
Total long-term debt, less current maturities	$	418,339	$	397,065

The following information relates to short-term borrowings:



(in thousands, except percentages)	2017			2016			2015
Maximum amount borrowed	$	367,000		$	412,000		$	308,500
Weighted average interest rate	2.56		%	1.94		%	1.64		%

Long-Term Debt

Recourse Debt

Long-term debt consists of the following:



	December 31,
(in thousands, except percentages)	2017		2016
Note payable, 4.07%, payable at maturity, due 2021	$	26,000	$	26,000
Notes payable, 3.72%, paid 2017	—		25,000
Note payable, 4.55%, payable at maturity, due 2023	24,000		24,000
Note payable, 4.85%, payable at maturity, due 2026	25,000		25,000
Note payable, 6.78%, payable at maturity, due 2018	41,500		41,500
Note payable, 4.92%, payable in increasing amounts ($2.2 million for 2017), plus interest, due 2021 (a)	18,241		20,443
Note payable, 4.76%, payable in increasing amounts ($2.1 million for 2017) plus interest, due 2028 (a)	45,936		47,990
Note payable, variable rate (3.86% at December 31, 2017), payable in increasing amounts ($1.4 million for 2017) plus interest, due 2023 (a)	17,786		19,179
Note payable, 3.29%, payable in increasing amounts ($1.3 million for 2017) plus interest, due 2022 (a)	20,293		21,619
Note payable, 4.23%, payable quarterly in varying amounts ($0.7 million for 2017) plus interest, due 2021 (a)	10,479		11,136
Notes payable, variable rate, paid 2017	—		8,790
Note payable, variable rate (3.23% at December 31, 2017), payable in varying amounts ($0.3 million for 2017), plus interest, due 2026 (a)	8,762		9,016
Note payable, 4.76%, payable quarterly in varying amounts ($0.4 million for 2017) plus interest, due 2028 (a)	8,581		8,956
Note payable, 3.03%, payable at maturity, due 2022	100,000		30,000
Note payable, 3.33%, payable in increasing amounts ($1.0 million for 2017) plus interest, due 2025 (a)	25,960		27,000
Note payable, 4.5%, payable at maturity, due 2030	16,000		16,000
Note payable, 5.0%, payable at maturity, due 2040	14,000		14,000
Industrial development revenue bonds:
Note payable, variable rate, paid 2017	—		6,513
Variable rate (2.97% at December 31, 2017), payable at maturity, due 2024 (a)	14,500		—
Variable rate (3.33% at December 31, 2017), payable at maturity, due 2019 (a)	4,650		4,650
Variable rate (3.33% at December 31, 2017), payable at maturity, due 2025 (a)	3,100		3,100
Variable rate (3.25% at December 31, 2017), payable at maturity, due 2036	21,000		21,000
Debenture bonds, 2.65% to 5.00%, due 2018 through 2032	30,432		36,931
	$	476,220	$	447,823
Less: current maturities	54,205		47,545
Less: unamortized prepaid debt issuance costs	3,676		3,213
	$	418,339	$	397,065

(a) Debt is collateralized by first mortgages on certain facilities and related equipment or other assets with a book value of $159.9 million

The Company's short-term and long-term borrowing agreements include both financial and non-financial covenants that, among other things, require the Company at a minimum to maintain:


•	tangible net worth of not less than $255 million;


•	current ratio net of hedged inventory of not less than 1.25 to 1.00;


•	long-term debt to capitalization of not more than 70%;


•	working capital of not less than $150 million; and


•	interest coverage ratio of not less than 2.65 to 1.00.

The Company was in compliance with these financial covenants at and during the years ended December 31, 2017 and 2016.

The aggregate annual maturities of long-term debt are as follows: 2018 -- $54.6 million; 2019 -- $12.1 million; 2020 -- $20.8 million; 2021 -- $35.6 million; 2022 -- $150.8 million; and $202.3 million thereafter.

Non-Recourse Debt

The Company's non-recourse debt, including the lines of credit, held by TADE includes separate financial covenants relating solely to the collateralized TADE assets. The covenants require the following:


•	working capital not less than $14 million; and


•	debt service coverage ratio of not less than 1.25 to 1.00.

The Company was in compliance with these financial covenants at and during the years ended December 31, 2017 and 2016.