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Note 9 - Long-term Debt

3 Months Ended

Dec. 31, 2023

9.	Long-Term Debt

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. All other terms and requirements of the Term Notes were retained. In conjunction with the amendment of the Term Notes, 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.

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 7 for additional information regarding the interest rate swap and Note 8 for additional information regarding the Revolving Note.

On July 28, 2023, Midstream entered into the Fifth Amendment to Credit Agreement and related Promissory Notes on the non-revolving credit facility. The Fifth Amendment revised the interest rate from Term SOFR plus 1.50% to Term SOFR plus 2.00% and extended the maturity date of the Promissory Notes to December 31, 2024. All other terms and requirements remain unchanged.

Long-term debt consists of the following:

	December 31, 2023					September 30, 2023
	Principal			Unamortized Debt Issuance Costs		Principal			Unamortized Debt Issuance Costs
Roanoke Gas:
Unsecured senior notes payable at 4.26%, due September 18, 2034	$	30,500,000		$	103,782	$	30,500,000		$	106,195
Unsecured term notes payable at 3.58%, due October 2, 2027		8,000,000			18,060		8,000,000			19,264
Unsecured term notes payable at 4.41%, due March 28, 2031		10,000,000			22,711		10,000,000			23,495
Unsecured term notes payable at 3.60%, due December 6, 2029		10,000,000			21,136		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			31,983		10,000,000			33,666
Midstream:
Unsecured term notes payable at Term SOFR plus 2.00%, due December 31, 2024		23,000,000			16,217		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			6,019		14,000,000			6,621
Unsecured term note payable at 30-day LIBOR plus 1.20%, due June 1, 2024 with monthly principal installments of $41,667 that began July 1, 2022 (swap rate at 3.14%)		9,250,000			982		9,375,000			1,571
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 (swap rate at 2.443%)		6,800,000			17,914		7,200,000			19,057
Total long-term debt		136,550,000			238,804		137,075,000			255,272
Less: current maturities of long-term debt		(33,850,000	)		—		(10,975,000	)		—
Total long-term debt, net current maturities	$	102,700,000		$	238,804	$	126,100,000		$	255,272

Debt issuance costs are amortized over the life of the related debt. As of December 31, 2023 and September 30, 2023, the Company also had an unamortized loss on the early retirement of debt of $1,227,512 and $1,256,059, respectively, which has been deferred as a regulatory asset and is being amortized over a 20-year period.

All 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 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 the non-cash impairments 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 Company was in compliance with all debt covenants as of December 31, 2023 and September 30, 2023.