Long-Term Debt

12 Months Ended

Oct. 31, 2020

Long-term debt is comprised of the following at October 31 (in thousands):


	2020		2019
Farm Credit West revolving and non-revolving lines of credit: The interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 0.15% at October 31, 2020, plus 1.60%. The interest rate for the $40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77%. Interest is payable monthly and the principal is due in full on July 1, 2022.	$	102,251	$	82,843

Farm Credit West term loan: Effective July 1, 2020, the interest rate was fixed at 2.48%. The loan is payable in quarterly installments through November 2022.	1,438		2,035

Farm Credit West term loan: Effective July 1, 2020, the interest rate was fixed at 3.24%. The loan is payable in monthly installments through October 2035.	1,029		1,078

Farm Credit West term loan: Effective July 1, 2020, the interest rate was fixed at 3.24%. The loan is payable in monthly installments through March 2036.	8,433		8,823

Farm Credit West term loan: Effective July 1, 2020, the interest rate was fixed at 2.77% until July 1, 2025, becoming variable for the remainder of the loan. The loan is payable in monthly installments though March 2036.	6,220		6,522

Wells Fargo term loan: The interest rate is fixed at 3.58%. The loan is payable in monthly installments through January 2023.	3,491		4,955

Banco de Chile term loan: The interest rate is fixed at 6.48%. The loan is payable in annual installments through January 2025.	1,205		1,386

Note Payable: The interest rate ranges from 5.00% to 7.00% and was 6.00% at October 31, 2020. The loan includes interest-only monthly payments and principal is due in February 2023.	1,435		1,435

Banco de Chile COVID-19 loans: The interest rates are fixed at 3.48%. The loans are payable in monthly installments beginning February 2021 through September 2024.	522		—
Subtotal	126,024		109,077
Less deferred financing costs, net of accumulated amortization	176		162
Total long-term debt, net	125,848		108,915
Less current portion	3,277		3,023
Long-term debt, less current portion	$	122,571	$	105,892

The Company and Farm Credit West, FLCA (“Farm Credit West”) are parties to that certain Master Loan Agreement (the “Loan Agreement”), dated June 20, 2017, which includes a Revolving Credit Supplement and a Non-Revolving Credit Supplement (together, the “Supplements”).

On June 30, 2020, the Company and Farm Credit West entered into a Conversion Agreement to convert the term loans noted above to fixed interest rate loans effective July 1, 2020. No changes were made to the outstanding principal balances on the term loans and the Company made no cash repayments of principal. The rates are subject to a prepayment restriction period for a portion of the fixed rate term that will expire on January 1, 2021, after which the Company may prepay any amounts without penalty.

12. Long-Term Debt (continued)

In March 2020, the Company entered into a revolving equity line of credit promissory note and loan agreement with Farm Credit West for a $15,000,000 Revolving Equity Line of Credit (the "RELOC") secured by a first lien on the Windfall Investors, LLC property. The RELOC matures in 2043 and features a 3-year draw period followed by 20 years of fully amortized loan payments. The interest rate is variable with monthly interest-only payments during the 3-year draw period and monthly principal and interest payments thereafter.

The Supplements and RELOC provide aggregate borrowing capacity of $130,000,000 comprised of $75,000,000 under the Revolving Credit Supplement, $40,000,000 under the Non-Revolving Credit Supplement and $15,000,000 under the RELOC. The borrowing capacity based on collateral value was $130,000,000 at October 31, 2020, of which $27,749,000 was available to borrow.

All indebtedness under the Loan Agreement and RELOC with Farm Credit West, including any indebtedness under the Supplements, is secured by a first lien on certain of its agricultural properties in Tulare, Ventura and San Luis Obispo counties in California and certain of the Company's building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties. The Loan Agreement includes customary default provisions that provide should an event of default occur, Farm Credit West, at its option, may declare all or any portion of the indebtedness under the Loan Agreement to be immediately due and payable without demand, notice of non-payment, protest or prior recourse to collateral, and terminate or suspend the Company's right to draw or request funds on any loan or line of credit.

In December 2019, Farm Credit West declared an annual cash patronage dividend of 1.00% of average eligible loan balances. The Company received $966,000 in February 2020. In July 2020, Farm Credit West declared an additional cash patronage dividend of $600,000, which the Company received in August 2020. In February 2019, the Company received an annual cash patronage dividend of $853,000.

The Loan Agreement subjects the Company to affirmative and restrictive covenants including, among other customary covenants, financial reporting requirements, requirements to maintain and repair any collateral, restrictions on the sale of assets, restrictions on the use of proceeds, prohibitions on the incurrence of additional debt and restrictions on the purchase or sale of major assets of the Company's business. The Company is also subject to a covenant that it will maintain a debt service coverage ratio greater than 1.25:1.0 measured annually at October 31. In August 2020, Farm Credit West modified the covenant to defer measurement at October 31, 2020 and revert to a debt service coverage ratio of 1.25:1.0 measured as of October 31, 2021. The Company was not in compliance with the Wells Fargo covenant at October 31, 2020 and the non-compliance was waived. This loan is secured by certain lemon packing equipment.

In July and September 2020, PDA and San Pablo entered into term loan agreements for an aggregate amount of approximately $522,000. These small business loans are guaranteed by the Chilean government in response to economic instability caused by the COVID-19 pandemic. The unsecured loans mature in July and September 2024, bear interest at fixed rates of 3.48% and 2.90% and are payable in monthly installments beginning February and April 2021, respectively.

Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress. The Company capitalized interest of $921,000 and $1,369,000 during the fiscal years ended 2020 and 2019, respectively. Capitalized interest is included in property, plant and equipment and real estate development assets in the Company’s consolidated balance sheets.

The Company incurs certain loan fees and costs associated with its new or amended credit arrangements. Such costs are capitalized as deferred financing costs and amortized as interest expense using the straight-line method over the terms of the credit agreements. The balance of deferred financing costs was $176,000 and $162,000, net of amortization at October 31, 2020 and 2019, respectively and was included in long-term debt on the Company’s consolidated balance sheet.

Principal payments on the Company’s long-term debt are due as follows (in thousands):


2021	$	3,277
2022	105,606
2023	3,157
2024	1,162
2025	1,450
Thereafter	11,372
	$	126,024