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Debt
 12 Months Ended
Jun. 30, 2024
Debt  
Debt

6.   Debt

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Subsequent Event – 2024 Credit Agreement

In July 2024, we entered into a Credit Agreement, (the “2024 Credit Agreement”) with a group of lenders, to refinance all our outstanding debt, to pay fees and expenses of the transaction, to finance the purchase price of the Proposed Acquisition upon completion and for ongoing working capital requirements and general corporate purposes. See “Note 17 — Subsequent Event — 2024 Credit Agreement.”

Term Loans and Revolving Credit Facilities

In April 2021, we entered into an amended and restated credit agreement (the “2021 Credit Agreement”) under which we had a term A loan in an aggregate initial principal amount of $300,000 (the “2021 Term A Loan”) and a revolving credit facility under which we could borrow up to $250,000, subject to the terms of the agreement (the “2021 Revolver”). In November 2022, we amended the 2021 Credit Facilities to increase the revolving commitments under the 2021 Revolver to an aggregate amount of $310,000 and to adopt the SOFR as the reference for the fluctuating rate of interest on the 2021 Credit Facilities, replacing the LIBOR reference rate. In June 2023, we obtained an additional incremental Term loan (the “2023 Incremental Term Loan”) in the amount of $50,000 (the 2021 Revolver, the 2021 Term A Loan, and the 2023 Incremental Term Loan are collectively referred to as the “2021 Credit Facilities”).

Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of the Company and its subsidiaries’ net consolidated first lien indebtedness to the Company and its subsidiaries’ consolidated EBITDA (the “First Lien Net Leverage Ratio”). The interest rate per annum applicable to the 2021 Revolver and the 2021 Term A Loan is based on a fluctuating rate of interest plus an applicable rate equal to 1.50%, 1.75%, 2.00% or 2.25% in the case of adjusted SOFR rate loans and 0.50%, 0.75%, 1.00% or 1.25% in the case of base rate loans. The interest rate per annum applicable to the 2023 Incremental Term Loan is based on a fluctuating rate of interest plus an applicable rate equal to 2.00%, 2.25%, 2.50% or 2.75% in the case of adjusted SOFR rate loans and 1.00%, 1.25%, 1.50% or 1.75% in the case of base rate loans. The applicable rates are based on the First Lien Net Leverage Ratio (as defined in the 2021 Credit Agreement, as amended).

Pursuant to the terms of the 2021 Credit Agreement, the 2021 Credit Facilities are subject to various covenants that, among other things and subject to the permitted exceptions described therein, restrict us and our subsidiaries with respect to: (i) incurring additional debt; (ii) making certain restricted payments or making optional redemptions of other indebtedness; (iii) making investments or acquiring assets; (iv) disposing of assets (other than in the ordinary course of

business); (v) creating any liens on our assets; (vi) entering into transactions with affiliates; (vii) entering into merger or consolidation transactions; and (viii) creating guarantee obligations; provided, however, that we are permitted to pay distributions to stockholders out of available cash subject to certain annual limitations and so long as no default or event of default under the 2021 Credit Facilities shall have occurred and be continuing at the time such distribution is declared. Indebtedness under the 2021 Credit Facilities is collateralized by a first priority lien on substantially all assets of Phibro and certain of our domestic subsidiaries. The 2021 Credit Facilities mature in April 2026.

The 2021 Credit Agreement requires, among other things, compliance with financial covenants that permit: (i) a maximum First Lien Net Leverage Ratio of 4.00:1.00 (or, specifically with respect to the Test Periods ended June 30, 2024, a maximum of 4.25:1.00); and (ii) a minimum interest coverage ratio of 3.00:1.00, each calculated on a trailing four-quarter basis. The 2021 Credit Agreement contains an acceleration clause should an event of default (as defined in the 2021 Credit Agreement) occur. As of June 30, 2024, we were in compliance with the financial covenants.

As of June 30, 2024, we had $176,000 in borrowings drawn under the 2021 Revolver and had outstanding letters of credit of $2,294, leaving $131,706 available for further borrowings and letters of credit under the 2021 Revolver, subject to restrictions in our 2021 Credit Facilities. We obtain letters of credit in connection with certain regulatory and insurance obligations, inventory purchases and other contractual obligations. The terms of these letters of credit are all less than one year.

Other Long-Term Debt

In September 2022, we entered into a credit agreement (the “2022 Term Loan”) in the amount of $12,000, collateralized by certain facilities. The 2022 Term Loan matures in September 2027. The interest rate per annum applicable to the 2022 Term Loan is based on a fluctuating rate of interest, at the Company’s election from time to time, equal to either (i) one-month adjusted SOFR plus 2.00%; or (ii) a base rate determined by reference to the greater of (a) the Prime Rate and (b) the Federal Funds Effective Rate plus 0.50%. The 2022 Term Loan is repayable in monthly installments of $35, with the balance payable at maturity.

Interest Rates

Interest rates as of the balance sheet dates and the weighted-average rates for the years presented were:

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June 30

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Years Ended June 30

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2024

2023

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2024

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2023

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2022

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2021 Revolver

 

6.00

%

6.09

%

  

6.14

%

5.42

%

2.08

%

2021 Term A Loan

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2.36

%

2.36

%

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2.36

%

2.37

%

2.99

%

2023 Incremental Term Loan

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7.68

%

7.44

%

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7.64

%

7.40

%

—

%

2022 Term Loan

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7.43

%

7.25

%

​

7.41

%

6.43

%

—

%

 

 

Interest rates as of the balance sheet dates are based on rates in effect as of those dates, including SOFR fluctuating rates of interest, applicable rates and the interest rate swap agreement.

We are a party to an interest rate swap agreement on $300,000 of notional principal that effectively converts the floating SOFR portion of our interest obligation on that amount of debt to a fixed rate of 0.61% through June 2025. We have designated the interest rate swap as a highly effective cash flow hedge. For additional details, see “Note 14 — Derivatives.”

Debt Maturities

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As of June 30

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2024

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2023

2021 Term A Loan due April 2026

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$

256,875

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$

273,750

2023 Incremental Term Loan due April 2026

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45,000

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50,000

2022 Term Loan due September 2027

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11,265

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11,685

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313,140

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335,435

Unamortized debt issuance costs

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(1,056)

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(1,599)

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312,084

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333,836

Less: current maturities of long-term debt and other

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(29,795)

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(22,295)

Long-term debt

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$

282,289

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$

311,541

 

 

Interest rates in the table are based on rates in effect as of the balance sheet dates, including fluctuating rates of interest, applicable rates and the interest rate swap agreement.

Aggregate Maturities of Long-Term Debt and Revolver

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For the Years Ending June 30

    

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Annual Maturities

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Interest Payments

2025

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$

29,795

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$

19,785

2026

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272,920

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26,598

2027

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​

420

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​

755

2028

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​

10,005

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​

184

Total

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$

313,140

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$

47,322

 

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For purposes of estimating future interest payments until maturity, we assume long-term debt decreases in accordance with the scheduled amortization and the 2021 Revolver continues unchanged at the June 30, 2024. We assume the March 2020 interest rate swap agreement remains in place through its June 2025 maturity and future interest rates and applicable rates are the same as the rates at June 30, 2024.