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Long-Term Debt | 12 Months Ended
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Dec. 31, 2021
Debt Disclosure [Abstract] |
Long-Term Debt | 7. Long-Term Debt
|  | December 31, |
|  | 2021 |  |  | 2020 |
|  | (In Thousands) |
Working Capital Revolver Loan, with a current interest rate of 3.75% (A) |  | $ | — |  |  | $ | — |
Senior Secured Notes due 2028 (B) |  |  | 500,000 |  |  |  | — |
Senior Secured Notes due 2023 (B) |  |  | — |  |  |  | 435,000 |
Secured Financing due 2023, with an interest rate of 8.32% (C) |  |  | 7,712 |  |  |  | 10,715 |
Secured Loan Agreement due 2025, with an interest rate of 8.75% (D) |  |  | 5,328 |  |  |  | 6,834 |
Secured Financing Agreement due 2025, with an interest rate of 8.75% (E) |  |  | 23,987 |  |  |  | 28,636 |
Unsecured Loan Agreement due 2022, with an interest rate of 1.00% (F) |  |  | — |  |  |  | 10,000 |
Secured Promissory Note due 2021 |  |  | — |  |  |  | 1,221 |
Other |  |  | 339 |  |  |  | 432 |
Unamortized debt issuance costs |  |  | (9,722 | ) |  |  | (8,648 | )
|  |  | 527,644 |  |  |  | 484,190 |
Less current portion of long-term debt (G) |  |  | 9,454 |  |  |  | 16,801 |
Long-term debt due after one year, net (G) |  | $ | 518,190 |  |  | $ | 467,389 |
7. Long-Term Debt (continued) (A) Our revolving credit facility, as amended (the “Working Capital Revolver Loan”), provides for advances up to $65 million (the “Maximum Revolver Amount”), based on specific percentages of eligible accounts receivable and inventories and up to $10 million of letters of credit, the outstanding amount of which reduces the available for borrowing under the Working Capital Revolver Loan. At December 31, 2021, our available borrowings under our Working Capital Revolver Loan were approximately $61.3 million, based on our eligible collateral, less outstanding letters of credit and loan balance. The maturity date of the Working Capital Revolver Loan is on the earlier of (i) the date that is 90 days prior to the earliest stated maturity date of the Senior Secured Notes (unless refinanced or repaid) and (ii) February 26, 2024. Subject to certain conditions and subject to lender approval, the Maximum Revolver Amount may increase up to an additional $10 million. The Working Capital Revolver Loan also provides for a springing financial covenant (the “Financial Covenant”), which requires that, if the borrowing availability is less than 10.0% of the total revolver commitments, then the borrowers must maintain a minimum fixed charge coverage ratio of not less than 1.00 to 1.00. The Financial Covenant, if triggered, is tested monthly. Interest accrues on outstanding borrowings under the Working Capital Revolver Loan at a rate equal to, at our election, either (a) LIBOR for an interest period selected by us plus an applicable margin equal to 1.50% per annum or 1.75% per annum, depending on borrowing availability under the Working Capital Revolver Loan, or (b) Wells Fargo Capital Finance’s prime rate plus an applicable margin equal to 0.50% per annum or 0.75% per annum, depending on borrowing availability under the Working Capital Revolver Loan. Interest is paid quarterly, if applicable. The Working Capital Revolver Loan contains customary covenants including limitations on asset sales, liens, debt incurrence, restricted payments, investments, dividends and transactions with affiliates. The Working Capital Revolver Loan includes customary events of default. Upon the occurrence of any event of default, the obligations under the Working Capital Revolver Loan may be accelerated and the revolver commitments may be terminated. Obligations under the Working Capital Revolver Loan are secured by a first priority security interest in substantially all of our current assets, including accounts receivable and inventory, subject to certain customary exceptions. Also, the lender provided LSB a consent to close the Exchange Transaction discussed in Note 2 and to allow for the payment of dividends to the holders of the Series B and Series D Preferred discussed in Note 12. (B) On October 14, 2021, LSB completed the issuance and sale of $500 million in aggregate principal amount of its 6.25% Senior Secured Notes due 2028 (the “New Notes”). The New Notes were issued pursuant to an indenture, dated as of October 14, 2021 (the “Indenture”), by and among the LSB, the subsidiary guarantors named therein, and Wilmington Trust, National Association, a national banking association, as trustee and collateral agent. The New Notes were issued at a price equal to 100% of their face value. Most of the proceeds from the New Notes were used to redeem all of our existing Senior Secured Notes due 2023 (the "Old Notes"), to pay related transaction fees, and the remaining portion to be used for general corporate purposes. The redemption was completed by the trustee on October 29, 2021. The Old Notes were redeemed in accordance with the contractual terms and was accounted for as an extinguishment of debt. As a result, we recognized a loss on extinguishment of debt of approximately $20.3 million in 2021, primarily consisting of the contractual redemption premium paid and the expensing of unamortized debt issuance costs associated with the Old Notes. The New Notes mature on October 15, 2028, ranking senior in right of payment to all of our debt that is expressly subordinated in right of payment to the notes, and will rank pari passu in right of payment with all of our liabilities that are not so subordinated, including the Working Capital Revolver Loan. LSB’s obligations under the New Notes are jointly and severally guaranteed by the subsidiary guarantors named in the Indenture on a senior secured basis. Interest on the New Notes accrues at a rate of 6.25% per annum and is payable semi-annually in arrears on May 15 and October 15 of each year, beginning on May 15, 2022. Pursuant to the Indenture, LSB may redeem the New Notes at its option, in whole or in part, at certain redemption prices, including a “make-whole” premium, as set forth in the Indenture but also includes redemption requirements associated with a change of control (as defined in the Indenture). The New Notes do not have any conversion features. In addition, the Indenture contains customary covenants that limit, among other things, LSB and certain of its subsidiaries’ ability to engage in certain transactions and also provides for customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is continuing, the trustee or holders of at least 25% in principal amount of the then outstanding New Notes may declare the principal of and accrued but unpaid interest on all the New Notes to be due and payable. 7. Long-Term Debt (continued) LSB may redeem the New Notes at its option, in whole or in part, subject to the payment of a premium of 3.125% of the principal amount so redeemed, in the case of any optional redemption on or after October 15, 2024. If LSB experiences a change of control, it must offer to purchase the New Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to but excluding the date of purchase. The Indenture contains covenants that limit, among other things, LSB and certain of its subsidiaries’ ability to (1) incur additional indebtedness; (2) declare or pay dividends, redeem stock or make other distributions to stockholders; (3) make other restricted payments, including investments; (4) create dividend and other payment restrictions affecting its subsidiaries; (5) create liens or use assets as security in other transactions; (6) merge or consolidate, or sell, transfer, lease or dispose of all or substantially all of our assets; and (7) enter into transactions with affiliates. Further, during any such time when the New Notes are rated investment grade by each of Moody’s Investors Service, Inc. and Standard & Poor’s Investors Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, certain of the covenants will be suspended with respect to the New Notes. Obligations in respect of the New Notes are secured by a first priority security interest in substantially all of our fixed assets, subject to certain customary exceptions. (C) El Dorado Chemical Company (“EDC”), one of our subsidiaries, is party to a secured financing arrangement with an affiliate of LSB Funding. Principal and interest are payable in 48 equal monthly installments with a final balloon payment of approximately $3 million due in June 2023. (D) EDC is party to a secured loan agreement with an affiliate of LSB Funding. Principal and interest will be payable in 60 equal monthly installments through March 2025. (E) In August 2020, El Dorado Ammonia L.L.C. (“EDA”), one of our subsidiaries, entered into a $30 million secured financing arrangement with an affiliate of LSB Funding. Beginning in September 2020, principal and interest are payable in 60 equal monthly installments with a final balloon payment of approximately $5 million due in August 2025. This financing arrangement is secured by an ammonia storage tank and is guaranteed by LSB. (F) In April 2020, LSB entered into a federally guaranteed loan agreement (“PPP loan”) for $10 million with a lender pursuant to a new loan program through the U.S. Small Business Administration (“SBA”) as the result of the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and amended by the Paycheck Protection Program Flexibility Act of 2020. We applied ASC 470, Debt, to account for the PPP loan. We have used all of the proceeds from the PPP loan for payroll, rent, utilities, and other specified costs that qualify for loan forgiveness. In April 2021, we submitted the PPP loan forgiveness application to the lender. In June 2021, the PPP loan was fully forgiven by the SBA and lender. As a result, we recognized a gain on extinguishment of debt of $10 million in 2021. (G) Maturities of long-term debt for each of the five years after December 31, 2021 are as follows (in thousands):
2022 |  | $ | 9,454 |
2023 |  |  | 10,900 |
2024 |  |  | 7,427 |
2025 |  |  | 9,585 |
2026 |  |  | — |
Thereafter |  |  | 500,000 |
Less: Debt issuance costs |  |  | 9,722 |
|  | $ | 527,644 |

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