Title
Resolution - Approval of Authorization for Amendments and Extensions and Expiration of CoBank Loan Facilities for the Cooperative - R Kruger
Other Info
Submitted By: Renee Oelschleger on behalf Randy Kruger Department: Chief Financial Officer
Financial Impact and Cost/Benefit Considerations: As discussed in Executive Session.
Discussion
The Cooperative has existing long-term and short-term debt (secured and unsecured) to finance the operations and expenses of the Cooperative with CoBank, ACB (“CoBank”).
In November 2014, the Cooperative adopted a resolution approving up to $100 million for an unsecured 364-day revolving credit facility with CoBank and also approved up to a $250 million secured term loan with CoBank.
In March 2016, the Cooperative approved increasing the unsecured revolving credit facility with CoBank to an amount not to exceed $200 million.
In September 2016, the Cooperative approved decreasing the amount of the secured term loan with CoBank to $100 million.
In March 2018, the Cooperative by amendment reduced the unsecured revolving credit facility with CoBank to an amount not to exceed $80 million.
In December 2020, the Cooperative authorized decreasing the amount of the unsecured revolving credit facility with CoBank to an amount not to exceed $15 million with a term up to five years and increased the amount of the secured term loan with CoBank to $125 million for a period of two years.
However, in March 2021 the Cooperative executed an amendment to its unsecured revolving credit facility with CoBank to extend its term through August 31, 2021 prior to such amendments from December 2020 becoming effective.
To address the financial impact of Winter Storm Uri, the Cooperative is assessing its ongoing financial structure and options available in consideration of the financial health of the Cooperative and in the best interests of the Cooperative.
The Cooperative now would like to increase its unsecured revolving credit facility with CoBank to an amount not to exceed $100 million with additional amendments to the length of the facility and other terms; and intends to let its existing secured term loan with CoBank in the authorized amount of $125 million, which has a current availability of $100 million, expire.
Body
WHEREAS, the Cooperative is currently a party to that certain 364-Day Revolving Credit Agreement (as heretofore amended, the “Revolving Credit Agreement”) with CoBank pursuant to which CoBank agreed to make loans to the Cooperative in an aggregate outstanding principal amount not to exceed $80,000,000 (such not-to-exceed amount, the “Commitment Amount”);
WHEREAS, to address the financial impact of Winter Storm Uri and for the best interests of the Cooperative, the Cooperative requires an increase of the Commitment Amount, and certain other amendments and an extension of the Revolving Credit Agreement; and
WHEREAS, to accomplish such increase and other amendments and such extension, the Cooperative desires to amend and restate the Revolving Credit Agreement and the Board has been presented with the principal terms of an Amended and Restated 364-Day Revolving Credit Agreement (the “A&R Revolving Credit Agreement”) to be entered into with CoBank and desires to delegate to the Authorized Officers (as defined below) to negotiate and approve the final form of the A&R Revolving Credit Agreement and any other documentation governing the unsecured revolving credit facility with CoBank setting forth such terms, and hereby finds that it is in the best interest of the Cooperative to authorize and approve the execution and delivery of the A&R Revolving Credit Agreement and such other documentation; and
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
COOPERATIVE, that the Cooperative authorizes the execution, delivery and performance of the A&R Revolving Credit Agreement and all of the terms thereof, including without limitation the increase of the Commitment Amount of up to an aggregate principal amount of $100,000,000 and such other amendments to the length of the facility and other terms as any Authorized Officer determines necessary or appropriate, such determination to be conclusively evidenced by such execution and delivery; and that the Cooperative further authorizes allowing its existing long-term secured term loan facility with CoBank in the authorized amount of $125 million to expire this year, pursuant to the terms of such facility; and
BE IT FURTHER RESOLVED, that any of the President and Vice President of the Board and the Chief Executive Officer and Chief Financial Officer of the Cooperative or any person designated in writing for such purpose by any of the foregoing (each an “Authorized Officer” and collectively, the “Authorized Officers”) are hereby expressly authorized (whether acting together or alone) and empowered from time to time, in the name and on behalf of the Cooperative, to: (i) negotiate, execute and deliver the A&R Revolving Credit Agreement and any ancillary documents, (ii) extend the maturity of the A&R Revolving Credit Agreement, (iii) execute and deliver applications and ancillary documents as may be required for borrowings under the A&R Revolving Credit Agreement, (iv) repay and reborrow all or any part of the amounts repaid to CoBank under the A&R Revolving Credit Agreement, in accordance with the terms thereof, (v) execute and deliver to CoBank such other agreements, addenda, documents or instruments as may be required by CoBank if the Cooperative elects to use CoBank’s electronic banking system; (vi) elect to use any services or products offered by CoBank relating to the A&R Revolving Credit Agreement, including without limitation an automated clearing house (ACH) service, and execute and deliver any forms required by CoBank in connection therewith, (vii) direct, by written or telephonic instructions or electronically, the disposition of the proceeds of any loan made under the A&R Revolving Credit Agreement or any property of the Cooperative at any time held by CoBank, and (viii) request by telephonic or written means or electronically, loan advances or other financial accommodations in connection with the A&R Revolving Credit Agreement, and fix rates and agree to pay fees, in accordance with the terms of the A&R Revolving Credit Agreement; the taking of any such action or actions to be conclusive evidence of the authorization therefor; and
BE IT FURTHER RESOLVED, that each of the Authorized Officers is hereby expressly authorized and empowered from time to time to: (i) make equity investments by the Cooperative in CoBank, as may be required by CoBank’s Bylaws and Capital Plan and as such officer deems proper and in the best interest of the Cooperative, (ii) direct by written or telephonic instructions or electronically, the disposition of proceeds held therein, and (iii) execute and deliver all documents and agreements necessary to carry out such authority; the taking of any such action or actions to be conclusive evidence of the authorization therefor; and
BE IT FURTHER RESOLVED, that the Board shall authorize and direct a delegate of the Cooperative to cast the ballot of the Cooperative in any and all proceedings in which the Cooperative is entitled to vote for the selection of a member of CoBank’s board of directors or for any other purpose, as necessary; and
BE IT FURTHER RESOLVED, that each of the Authorized Officers is hereby expressly authorized and empowered from time to time to do any and all acts, including to approve, execute and deliver on behalf of the Cooperative any amendments to the A&R Revolving Credit Agreement as such officer may determine to be necessary or desirable to, and in the best interests of, the Cooperative, such determination to be conclusively evidenced by the execution of any such amendment, supplement or other document; and
BE IT FURTHER RESOLVED, that the execution by any Authorized Officer of any document authorized by the foregoing Resolutions or any document executed in the accomplishment of any action or actions so authorized, is (or shall become upon delivery) the enforceable and binding act and obligation of the Cooperative, without the necessity of the signature or attestation of any other officer of the Cooperative or the affixing of the corporate seal; and
BE IT FURTHER RESOLVED, that all actions undertaken prior to the adoption of these Resolutions by any of the officers or representatives of the Cooperative in its name and for its account with CoBank in connection with the foregoing matters are hereby ratified, confirmed and adopted by the Board; and
BE IT FURTHER RESOLVED, that the Secretary of the Cooperative is hereby authorized and directed to certify to CoBank a copy of these Resolutions, and the Secretary or any one or more of the Authorized Officers may certify to CoBank the names and specimen signatures of the present Authorized Officers and, in the case of any future changes to any Authorized Officers, the fact of such changes and the name and specimen signature of the new Authorized Officers. These Resolutions shall be effective on and from the date of their adoption, passage, and approval.