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Note 7 - Long-term Debt | 6 Months Ended
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Mar. 31, 2024
Notes to Financial Statements |
Long-Term Debt [Text Block] |
7. | Long-Term Debt
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. Subsequent to the end of the quarter, 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 includes a 0.40% upfront fee and 0.125% unused line fee. The facility matures on May 2, 2026. With this agreement, Midstream has the ability and intent to refinance the $9 million note payable that will be remaining on June 1, 2024; accordingly, it has classified that amount as long-term on the condensed balance sheet as of March 31, 2024. 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 with 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, but the Company did re-designate its hedge documentation to address the suspension of repayments. 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 8 for additional information regarding the interest rate swap. Long-term debt consists of the following:
|  | March 31, 2024 |  |  | 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 |  |  | $ | 101,368 |  |  | $ | 30,500,000 |  |  | $ | 106,195 |
Unsecured term notes payable at 3.58%, due October 2, 2027 |  |  | 8,000,000 |  |  |  | 16,856 |  |  |  | 8,000,000 |  |  |  | 19,264 |
Unsecured term notes payable at 4.41%, due March 28, 2031 |  |  | 10,000,000 |  |  |  | 21,928 |  |  |  | 10,000,000 |  |  |  | 23,495 |
Unsecured term notes payable at 3.60%, due December 6, 2029 |  |  | 10,000,000 |  |  |  | 20,256 |  |  |  | 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 |  |  |  | 30,300 |  |  |  | 10,000,000 |  |  |  | 33,666 |
Midstream: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unsecured term notes payable at Term SOFR plus 2.00%, due December 31, 2025 |  |  | 23,275,000 |  |  |  | 45,218 |  |  |  | 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 |  |  |  | 5,417 |  |  |  | 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%) |  |  | 9,125,000 |  |  |  | — |  |  |  | 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, were suspended April 1, 2024, and will resume April 1, 2025 (swap rate at 2.443% on designated principal) |  |  | 6,400,000 |  |  |  | 16,770 |  |  |  | 7,200,000 |  |  |  | 19,057 |
Total long-term debt |  |  | 136,300,000 |  |  |  | 258,113 |  |  |  | 137,075,000 |  |  |  | 255,272 |
Less: current maturities of long-term debt |  |  | (125,000 | ) |  |  | — |  |  |  | (10,975,000 | ) |  |  | — |
Total long-term debt, net current maturities |  | $ | 136,175,000 |  |  | $ | 258,113 |  |  | $ | 126,100,000 |  |  | $ | 255,272 |
Debt issuance costs are amortized over the life of the related debt. As of March 31, 2024 and September 30, 2023, the Company also had an unamortized loss on the early retirement of debt of $1,198,965 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 (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 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 March 31, 2024 and September 30, 2023.

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