Note 8: Long-Term Debt

Our long-term debt consists of the following:


	June 30, 2015		December 31, 2014
	(In Thousands)
Working Capital Revolver Loan (A)	$	—	$	—
7.75% Senior Secured Notes due 2019 (B)		425,000		425,000
Secured Promissory Note due 2016, with a current interest rate of 3.28%		19,360		22,814
Secured Promissory Note due 2021, with a current interest rate of 5.25% (C)		16,189		—
Other, with a current weighted-average interest rate of 4.33%, most of which is secured primarily by machinery and equipment		9,637		9,504

		470,186		457,318
Less current portion of long-term debt		24,095		10,680

Long-term debt due after one year	$	446,091	$	446,638

(A) In June 2015, the Working Capital Revolver Loan was amended, by which the Lender released its second-priority security interest and liens in collateral that also secures, on a first priority basis, the 7.75% Senior Secured Notes. The amendment also amends the definition of Permitted Investments to include investments that are made:

•

To the extent that the Consolidated Leverage Ratio (as defined in the amendment) does not exceed 2.5 to 1.0;

•

In amounts not to exceed 50% of the cumulative consolidated net income or loss since August 7, 2013;

•

To permit $35 million in joint ventures; and

•

To permit $50 million in our subsidiary, Zena Energy LLC.

The amendment also provides that we can incur additional indebtedness if the Fixed Charge Coverage Ratio, as defined in the amendment, is greater than 2.0 to 1.0.

Our ability to make permitted investments or incur indebtedness is conditioned upon us not being in default and having at least 20% of the maximum revolver commitment or $20 million, whichever is greater, being available.

The Working Capital Revolver Loan continues to provide (a) advances up to $100 million are based on specified percentages of eligible accounts receivable and inventories (b), up to $15 million of letters of credit, the outstanding amount of which reduces the availability under the Working Capital Revolver Loan, and (c) the maturity date is April 13, 2018.

(B) The 7.75% Senior Secured Notes due 2019 bear interest at the rate of 7.75% per year and mature on August 1, 2019. Interest is to be paid semiannually on February 1st and August 1st. The Senior Secured Notes are general senior secured obligations of LSB. The Senior Secured Notes are jointly and severally and fully and unconditionally guaranteed by all of LSB’s current wholly-owned subsidiaries, with all of the guarantees, except two, being senior secured guarantees and two being senior unsecured guarantees. The Senior Secured Notes rank equally in right of payment to all of LSB and the guarantors’ existing and future senior secured debt, including the Working Capital Revolver Loan discussed above, and are senior in right of payment to all of LSB and the guarantors’ future subordinated indebtedness. LSB does not have independent assets or operations.

(C) The Secured Promissory Note due 2021 is an agreement between one of our subsidiaries EDC (subsequently assigned to LSB) and a lender for an original principal amount of approximately $16.2 million. The note bears interest at the rate of 5.25% per year and matures on March 26, 2021. Interest only is payable monthly for the first 12 months of the term. Principal and interest are payable monthly for the remaining term of the note. This note is secured by a natural gas pipeline being constructed at the El Dorado Facility.