Otter Tail Ag Enterprises gets notice of default from senior lender

By Angela McDaniels

Tacoma, Wash., June 9 - Otter Tail Ag Enterprises, LLC said it received a notice of default on June 3 from senior lender Agstar Financial Services, PCA.

The default applies to the company's master loan agreement with Agstar and the NMF construction and term loan agreement with MMCDC New Markets Fund II, LLC.

The events of default relate to the company's failure to pay required principal, interest and late fees under the Agstar and NMF agreements and failure to make required monthly payments under a capital lease agreement with U.S. Bank, NA.

Otter Tail must cure any and all defaults prior to June 15 or the entire amounts due under the Agstar and NMF agreements will become accelerated.

As previously reported, the company entered into a forbearance agreement with Agstar in March after it failed to make principal and interest payments due Feb. 1 and March 1. The forbearance also covered Otter Tail's failure to maintain an adequate borrowing base to support advances under the terms of its revolving line of credit.

Under the agreement, Agstar agreed not to act on the defaults through the earlier of occurrence of an event of default and April 30. All unpaid principal and interest payments were deferred to May 1, but the agreement required the full payment of these amounts by that date.

Otter Tail is a Fergus Falls, Minn., ethanol company.

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