Debt

12 Months Ended

Dec. 31, 2018

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 $32.9 million at December 31, 2018. As of December 31, 2018, the Company had $255.0 million of outstanding borrowings on the lines of credit of which $205.0 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.

ELEMENT, a consolidated subsidiary of the Company, entered into a financing agreement during the first quarter of 2018. This agreement provides a construction loan of up to $70 million. Upon project completion, the agreement provides the opportunity for the Company to convert the construction loan to a term loan of up to $50.0 million and a revolving term loan of up to $20.0 million. The maturity date of the credit agreement is March 2, 2025. During the construction period, borrowings under the credit agreement bear interest at variable interest rates, which are based off LIBOR plus an applicable spread. Upon conversion of the construction loan to a term loan, the Company will have the option of fixing the interest on portions of the loans, or continuing at the previously described variable interest rates. There are no outstanding borrowings under this agreement as of December 31, 2018. The agreements include both financial and non-financial covenants that ELEMENT, among other things, is required at a minimum to maintain various working capital levels and debt service coverage ratios based on project milestones as well as a minimum owner's equity level.

The Andersons Railcar Leasing Company LLC, a consolidated subsidiary of the Company, entered into a new line of credit agreement in the first quarter of 2018 and which was subsequently amended and restated during the third quarter of 2018. The amended agreement provides for a credit facility in the amount of $200 million. The maturity date of the loan agreement is August 2, 2021. Borrowings under the agreement bear interest at market driven, variable interest rates, which are based off LIBOR plus an applicable spread. The agreement includes both financial and non-financial covenants, including maintaining certain leverage and interest coverage ratios, tangible net worth and utilization levels. There are $118.0 million of outstanding borrowings, classified as non-recourse debt, under this agreement as of December 31, 2018, the proceeds of which were used to purchase Rail Group assets.

The Company’s short-term and long-term debt at December 31, 2018 and 2017 consisted of the following:



	December 31,
(in thousands)	2018		2017
Short-term debt - non-recourse	$	—	$	—
Short-term debt - recourse	205,000		22,000
Total short-term debt	$	205,000	$	22,000
Current maturities of long-term debt – non-recourse	$	4,842	$	—
Current maturities of long-term debt – recourse	16,747		54,205
Total current maturities of long-term debt	$	21,589	$	54,205
Long-term debt, less current maturities – non-recourse	$	146,353	$	—
Long-term debt, less current maturities – recourse	349,834		418,339
Total long-term debt, less current maturities	$	496,187	$	418,339

The following information relates to short-term borrowings:



(in thousands, except percentages)	2018			2017			2016
Maximum amount borrowed	$	555,000		$	367,000		$	412,000
Weighted average interest rate	3.32		%	2.56		%	1.94		%

Long-Term Debt

Recourse Debt

Long-term debt consists of the following:



	December 31,
(in thousands, except percentages)	2018		2017
Note payable, 4.07%, payable at maturity, due 2021	$	26,000	$	26,000
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, paid 2018	—		41,500
Note payable, 4.92%, payable in increasing amounts ($2.0 million for 2018), plus interest, due 2021 (a)	16,227		18,241
Note payable, 4.76%, payable in increasing amounts ($1.6 million for 2018) plus interest, due 2028 (a)	44,330		45,936
Note payable, variable rate (4.85% at December 31, 2018), payable in increasing amounts ($1.3 million for 2018) plus interest, due 2023 (a)	16,452		17,786
Note payable, 3.29%, payable in increasing amounts ($1.4 million for 2018) plus interest, due 2022 (a)	18,918		20,293
Note payable, 4.23%, payable quarterly in varying amounts ($0.5 million for 2018) plus interest, due 2021 (a)	9,948		10,479
Note payable, variable rate (4.19% at December 31, 2018), payable in varying amounts ($0.3 million for 2018), plus interest, due 2026 (a)	8,417		8,762
Note payable, 4.76%, payable quarterly in varying amounts ($0.3 million for 2018) plus interest, due 2028 (a)	8,288		8,581
Line of credit, variable rate (3.79% at December 31, 2018), payable at maturity, due 2022	50,000		100,000
Note payable, 3.33%, payable in increasing amounts ($1.1 million for 2018) plus interest, due 2025 (a)	24,888		25,960
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
Note payable, variable rate (4.15% at December 31, 2018), payable quarterly, ($1.25 million for 2018) due 2024 (a)	13,250		14,500
Industrial development revenue bonds:
Variable rate (3.19% at December 31, 2018), payable at maturity, due 2019 (a)	4,650		4,650
Variable rate (3.18% at December 31, 2018), payable at maturity, due 2025 (a)	3,100		3,100
Variable rate (3.14% at December 31, 2018), payable at maturity, due 2036	21,000		21,000
Debenture bonds, 2.65% to 5.00%, due 2018 through 2032	27,323		30,432
	$	371,791	$	476,220
Less: current maturities	16,747		54,205
Less: unamortized prepaid debt issuance costs	5,210		3,676
	$	349,834	$	418,339

(a) Debt is collateralized by first mortgages on certain facilities and related equipment or other assets with a book value of $143.8 million

As of December 31, 2018, 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:


•	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, 2018 and 2017.

The aggregate annual maturities of recourse, long-term debt are as follows: 2019 -- $16.5 million; 2020 -- $15.9 million; 2021 -- $61.8 million; 2022 -- $74.8 million; 2023 -- $41.7 million; and $160.5 million thereafter.

Non-Recourse Debt

The Company's non-recourse long-term debt consists of the following:



	December 31,
(in thousands)	2018		2017
Line of credit, 4.46%, payable at maturity, due 2021	$	118,000	$	—
Non-recourse financing obligations, 3.60% to 4.94%, due 2019 through 2026	34,019		—
	$	152,019	$	—
Less: current maturities	4,842		—
Less: unamortized prepaid debt issuance costs	824		—
	$	146,353	$	—

The aggregate annual maturities of non-recourse, long-term debt are as follows: 2019 -- $4.8 million; 2020 -- $6.9 million; 2021 -- $123.9 million; 2022 -- $9.1 million; 2023 -- $0.9 million; and $6.4 million thereafter.