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Long-Term Debt (Tables)
 9 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt

Our long-term debt consists of the following:

 

    September 30,
2015		     December 31,
2014		  
    (In Thousands)  

Working Capital Revolver Loan, with a current interest rate of 3.75% (A)

   $ 13,301      $ —     

7.75% Senior Secured Notes due 2019 (B) 

     425,000        425,000   

Secured Promissory Note due 2016, with a current interest rate of 3.33%

     17,615        22,814   

Secured Promissory Note due 2021, with a current interest rate of 5.25% (C)

     16,189        —     

Secured Promissory Note due 2022, with a current interest rate of 4.21% (D)

     15,000        —     

Other, with a current weighted-average interest rate of 4.50%, most of which is secured primarily by machinery and equipment

     9,343        9,504   
 

 

 

    

 

 

  
    496,448        457,318   

Less current portion of long-term debt

     23,849        10,680   
 

 

 

    

 

 

  

Long-term debt due after one year

   $ 472,599      $ 446,638   
 

 

 

    

 

 

  

 

(A) In June 2015, the working capital revolver loan (as amended, 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 due 2019 (“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 L.L.C. (“Zena”)

 

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 our 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, which 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 Senior Secured Notes 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 one, being senior secured guarantees and one being a senior unsecured guarantee. The Senior Secured Notes rank equally in right of payment to all of LSB’s and the guarantors’ existing and future senior secured debt, including the Working Capital Revolver Loan, and are senior in right of payment to all of LSB’s and the guarantors’ future subordinated indebtedness. LSB does not have independent assets or operations.
(C) The secured promissory note due 2021 (the “Secured Promissory Note due 2021”) is an agreement between one of our subsidiaries, El Dorado Chemical Company (“EDC”), a subsidiary within our Chemical Business, and a lender for an original principal amount of approximately $16.2 million. The Secured Promissory Note due 2021 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 Secured Promissory Note due 2021. This Secured Promissory Note due 2021 is secured by a natural gas pipeline being constructed at the El Dorado Facility and is guaranteed by LSB.
(D) On September 16, 2015, El Dorado Ammonia L.L.C. (“EDA”), a subsidiary within our Chemical Business, entered into a secured promissory note due 2022 (the “Secured Promissory Note due 2022”) for the construction financing of an ammonia storage tank and related systems with an initial funding received of $15.0 million and a maximum principal note amount of $19.8 million. In November 2015, EDC and Koch Fertilizer entered into an ammonia purchase and sale agreement under which Koch Fertilizer agrees to purchase, with minimum purchase requirements, the ammonia that (a) will be produced at the El Dorado Facility and (b) that is in excess of El Dorado’s needs as discussed in Note 14 to Condensed Consolidated Financial Statements. Up to the Loan Conversion Date, EDA will make monthly interest payments on the outstanding principal borrowed.