Limoneira gets $100 million facility, repays Rabobank revolver

By Marisa Wong

Morgantown, W.Va., June 21 – Limoneira Co. entered into a $100 million loan agreement with Farm Credit West, FLCA that governs a revolving credit facility supplement and a non-revolving credit facility supplement, according to an 8-K filing with the Securities and Exchange Commission.

The $100 million aggregate borrowing capacity is comprised of $60 million under the revolving portion and $40 million under the non-revolving portion.

The interest rate is initially 2.89% and will be automatically adjusted beginning July 1 and on the first day of each month after that. The interest rate will be based on one-month Libor plus an applicable margin ranging from 160 basis points to 235 bps, depending on the ratio of current assets plus the remaining available commitment divided by current liabilities.

On July 1, 2018, and on each one-year anniversary after that, the company has the option to convert the Libor-based interest rate to a variable rate.

The facilities mature on July 1, 2022.

Loans are secured by a first lien on some of the company’s agricultural properties in Tulare and Ventura counties in California and some building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The loan agreement requires the company to maintain a debt service coverage ratio greater than 1.25 to 1.00 measured annually at Oct. 31.

Borrowings were used to pay down the remaining outstanding debt under the company’s prior revolving credit facility with Rabobank, NA.

In connection with the paydown, the company entered into a novation agreement to transfer a prior interest rate swap agreement from Rabobank to CoBank, ACB. The swap agreement had fixed the interest rate at 4.3% using an interest rate swap on $40 million of the prior credit facility.

Limoneira is a Santa Paula, Calif.-based agribusiness with prime agricultural land and operations, real estate and water rights in California.

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