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Note 6 - Borrowings
 6 Months Ended
Jun. 30, 2014
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

6)            Borrowings


Effective June 30, 2013, FutureFuel Chemical extended the term of its $50 million credit agreement with a commercial bank.  The loan is a revolving facility the proceeds of which may be used for working capital, capital expenditures, and the general corporate purposes of FutureFuel Chemical.  The facility terminates on June 30, 2018.  Advances are made pursuant to a borrowing base comprised of 85% of eligible accounts receivable plus 60% of eligible direct inventory plus 50% of eligible indirect inventory.  Advances are secured by a perfected first priority security interest in accounts receivable and inventory.  The interest rate floats at certain margins over the London Interbank Offered Rate (“LIBOR”) or base rate based upon the leverage ratio from time to time as set forth in the following table.


Leverage

Ratio

 

Base Rate

Margin

 

LIBOR

Margin

> 3

 

-0.55%

 

1.70%

> 2 < 3

 

-0.70%

 

1.50%

> 1 < 2

 

-1.00%

 

1.25%

< 1

 

-1.00%

 

1.00%


There is an unused commitment fee of 0.25% per annum. On the last day of each fiscal quarter, the ratio of EBITDA to fixed charges may not be less than 3:1. FutureFuel has guaranteed FutureFuel Chemical’s obligations under this credit agreement.


There were no borrowings under this credit agreement at June 30, 2014 or December 31, 2013.