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Alico, Inc. (ALCO) Announces New Credit Agreement

|Includes: Alico, Inc. (ALCO)

Alico, Inc. announced a credit agreement with a new lender to refinance the company’s revolving line of credit and term note issue. The agreement extends the terms of both obligations and lowers interest costs for the company.

Alico, Inc. has signed an agreement with Rabo Agrifinance, Inc. for $100 million to replace its existing revolving line of credit and term note with Farm Credit of Southwest Florida.

The new term note for Alico, Inc. will be in the amount of $40 million, and bears a variable rate of interest based on the one month London Interbank Offering Rate (LIBOR) plus 250 basis points. The revolving line of credit will be in the amount of $60 million, and has the same interest rate terms.

The term note will mature in October 2020, and is collateralized by approximately 21,000 acres of farmland that the company owns in Florida. The revolving line of credit has the same maturity date and is secured by 44,000 acres of farmland.

Alico, Inc. reported that the company has four debt covenants that it must maintain to be in compliance with both obligations:

• Current ratio must stay above 2 to 1
• Debt ratio must stay below 60%.
• The company must have a minimum tangible net worth of $80 million.
• The debt service coverage ratio must be more than 1.15 to 1.

For more information on the company, go to alicoinc.com

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