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Note 7 - Long-term Debt

12 Months Ended

Sep. 30, 2024

7.	LONG-TERM DEBT

Long-term debt consisted of the following:

	September 30
	2024					2023
	Principal			Unamortized Debt Issuance Costs		Principal			Unamortized Debt Issuance Costs
Roanoke Gas:
Unsecured senior note payable at 4.26%, due September 18, 2034	$	30,500,000		$	96,541	$	30,500,000		$	106,195
Unsecured term note payable at 3.58%, due October 2, 2027		8,000,000			14,448		8,000,000			19,264
Unsecured term note payable at 4.41%, due March 28, 2031		10,000,000			20,362		10,000,000			23,495
Unsecured term note payable at 3.60%, due December 6, 2029		10,000,000			18,494		10,000,000			22,017
Unsecured term note payable at 30-day SOFR plus 1.20%, due August 20, 2026 (swap rate at 2.00%)		15,000,000			—		15,000,000			—
Unsecured term note payable at Term SOFR plus 1.00%, due October 1, 2028 (swap rate at 2.49%)		10,000,000			27,044		10,000,000			33,666
Midstream:
Unsecured term note payable at Term SOFR plus 1.75% (1.55% beginning November 1, 2024), due December 31, 2025		24,855,000			32,299		23,000,000			23,386
Unsecured term note payable at Daily Simple SOFR plus 1.26448%, due June 12, 2026 (swap rate at 3.24%)		14,000,000			4,213		14,000,000			6,621
Unsecured term note payable at Daily Simple SOFR plus 1.26448%, due January 1, 2028 with quarterly principal installments of $400,000 that began April 1, 2023, were suspended April 1, 2024, and will resume April 1, 2025 (swap rate at 2.443% on designated principal)		6,400,000			21,406		7,200,000			19,057
Revolving credit facility at Daily Simple SOFR plus 2.215%, due May 2, 2026		9,000,000			47,285		—			—
Unsecured term note payable at 30-day LIBOR plus 1.20%, matured June 1, 2024 with monthly principal installments of $41,667 that began July 1, 2022 (swap rate at 3.14%)		—			—		9,375,000			1,571
Total long-term debt	$	137,755,000		$	282,092	$	137,075,000		$	255,272
Less: current maturities of long-term debt		(800,000	)		—		(10,975,000	)		—
Total long-term debt, net current maturities	$	136,955,000		$	282,092	$	126,100,000		$	255,272

On March 6, 2024, Midstream entered into the Sixth Amendment to Credit Agreement and related Promissory Notes on the non-revolving credit facility. The Sixth Amendment revised the interest rate from Term SOFR plus 2.00% to Term SOFR plus 2.00% subject to adjustment to Term SOFR plus 1.75% and Term SOFR plus 1.55% upon meeting certain milestones. The Sixth Amendment also consolidated the Promissory Notes to one Promissory Note with one lender, increased the available non-revolving credit facility to $25 million, and extended the maturity date to December 31, 2025. All other terms and requirements remain unchanged.

On May 2, 2024, Midstream established a new $9 million line of credit facility. The interest rate on the borrowings under the facility is SOFR plus 2.215%; the arrangement included a 0.40% upfront fee and 0.125% unused line fee. The facility matures on May 2, 2026.

On May 29, 2024, Midstream paid in full the remaining $9 million term note payable that was set to mature June 1, 2024 with proceeds from the new line of credit.

On June 28, 2023, Midstream amended and restated its $14 million and $8 million Term Notes initially entered into on June 12, 2019 and November 1, 2021, respectively. The amendments revised each of the original Term Note's interest rate from LIBOR plus 115 basis points to Daily Simple SOFR plus 126.448 basis points, effective July 1, 2023. On March 6, 2024, Midstream further amended and restated its $8 million Term Note. The amendment suspended quarterly principal payments beginning April 1, 2024 through January 1, 2025. Principal payments will commence again on April 1, 2025. All other terms and requirements of the Term Notes were retained. In conjunction with the original amendment of the Term Notes in June 2023, Midstream also amended the corresponding interest rate swaps associated with the Term Notes. The amendments provided for the floating rates on the interest rate swaps to continue to match the rate of the associated notes as well as retain the overall fixed interest rates of 3.24% and 2.443%, respectively. The interest rate swap related to the $8 million Term Note was not amended on March 6, 2024.

On March 24, 2023, Roanoke Gas amended and restated the $10 million Term Note originally entered into on September 24, 2021. The amendment revised the original Term Note's interest rate from LIBOR plus 100 basis points to Term SOFR plus 100 basis points. All other terms and requirements of the original Term Note were retained. The effective date of the Amended Term Note was April 1, 2023. In addition, on April 3, 2023, the interest rate swap was amended to align with the Amended Term Note and retained the fixed interest rate of 2.49%. In connection with the Revolving Note and Amended Term Note, Roanoke Gas also amended and restated the Loan Agreement dated September 24, 2021. The amendment provides for borrowing limits on the Revolving Note and amends certain financial conditions required of Roanoke Gas and Resources. All other terms and requirements of the original Loan Agreement were retained. See Note 1 for additional information regarding the interest rate swap.

Debt issuance costs are amortized over the life of the related debt. As of September 30, 2024 and 2023, the Company also had an unamortized loss on the early retirement of debt of $1,141,872 and $1,256,059, respectively, which has been deferred as a regulatory asset and is being amortized over a 20-year period.

All of the debt agreements set forth certain representations, warranties and covenants to which the Company is subject, including financial covenants that limit consolidated long-term indebtedness to not more than 65% of total capitalization. All of the debt agreements provide for Priority Indebtedness (defined in the debt agreements) to not exceed 15% of consolidated total assets. The $15 million and $10 million notes, as well as the line-of-credit, have an interest coverage ratio requirement of not less than 1.5 to 1, which excludes the effect of a non-cash impairment on the LLC investments up to the total investment as of December 31, 2021, as revised by the Seventh Amendment to the Credit Agreement. The $9 million revolving line of credit facility also has an interest coverage ratio of not less than 1.5 to 1. The Company was in compliance with all debt covenants as of September 30, 2024 and 2023.

The aggregate annual maturities of long-term debt for the next five years ending after September 30, 2024 are as follows:

Year Ending September 30	*Maturities*
2025	$	800,000
2026		64,455,000
2027		1,600,000
2028		10,400,000
2029		10,000,000
Thereafter		50,500,000
Total	$	137,755,000