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Debt
 9 Months Ended
Sep. 30, 2023
Debt  
Debt


On January 23, 2023, Eve Brazil entered into a loan agreement (the “BNDES Loan Agreement”) with Banco Nacional de Desenvolvimento Economico e Social (“BNDES”), pursuant to which BNDES agreed to grant two loans to Eve Brazil with an aggregate amount of R$490 million (approximately $98 million), to support the first phase of the development of the Company’s eVTOL project. All USD approximations use foreign currency exchange rate data as of September 30, 2023.


The first loan (“Sub-credit A”), in the amount of R$80 million (approximately $16 million), will be granted in Brazilian reais by Fundo Nacional Sobre Mudança Climática (“FNMC”), a BNDES fund that supports businesses focused on mitigating climate change and reducing carbon emissions. Sub-credit A has maturity dates on a monthly basis from March 2026 through February 2035. The second loan (“Sub-credit B”), in the amount of R$410 million (approximately $82 million), will be granted in US Dollars, as adjusted on a daily basis by the US Dollar sale rate published by the Central Bank of Brazil as the “PTAX” rate. Sub-credit B has maturity dates on a quarterly basis from May 2027 through February 2035. Eve Brazil made its first draw from the loans on September 12, 2023. In connection with the first draw from Sub-credit B, a one-time R$2 million (approximately $415,000) fee to BNDES was withheld from the proceeds.


The Company's long-term debt outstanding as of September 30, 2023 included:




September 30,
2023
Title Type Interest Rate Fair Value Carrying Amount
Sub-credit A Term Loan 4.55% $ 4,589,843 $ 5,819,957
Sub-credit B Term Loan (a) 4,911,539 5,903,767
Long-term debt principal $ 9,501,382 $ 11,723,724
Unamortized debt issuance costs (b) (404,034 )
Long-term debt $ 11,319,690


(a) A fixed rate is determined for each draw on the loan, calculated as 1.10% per year plus a fixed rate to be published by BNDES every 15 days in accordance with the BNDES Loan Agreement.

(b) Excludes $384,683 in deferred charges related to debt issuance costs that will be recognized pro-ratably when additional funds are drawn.


The long-term debt principal matures as follows:


Sub-credit A Sub-credit B
2023 $ - $ -
2024 - -
2025 - -
2026 538,885 -
2027 646,662 553,478
Thereafter 4,634,411 5,350,289
Total $ 5,819,957 $ 5,903,767


The BNDES loans shall be used by Eve Brazil within 36 months from the date of signing of the BNDES Loan Agreement. Otherwise, BNDES may terminate the BNDES Loan Agreement and any loans shall be paid by no later than February 15, 2035. The BNDES Loan Agreement provides that the availability of such loans are subject to BNDES’ rules and regulations and, in the case of Sub-credit A, FNMC’s budget. In the case of Sub-credit B, the loan is subject to rules and regulations of BNDES' financing program, which is subject to funding by the Conselho Monetário Nacional, Brazil’s National Monetary Council. Additionally, the BNDES Loan Agreement provides that the borrowing of any amount under these loans are subject to certain conditions, including, among others, the promulgation of a new law (which condition only applies to the first line of credit), the receipt by BNDES of a guarantee from an acceptable financial institution, absence of any facts that would have a material adverse effect on the economic or financial condition of Eve Brazil, and approval of the project by the applicable environmental entities.