2016 Q3 AGI Financial Report

Ag Growth International Inc.
Notes to unaudited interim condensed consolidated financial statements
[in thousands of Canadian dollars, except where otherwise noted and per share data]
September 30, 2016
[b] Long-term debt
The Series A secured notes were issued on October 29, 2009. The non-amortizing notes bear interest at 6.8%
payable quarterly and mature on October 29, 2016. The Series A secured notes are denominated in U.S. dollars.
Collateral for the Series A secured notes and term loans ranks pari passu and include a general security
agreement over all assets, first position collateral mortgages on land and buildings, assignments of rents and
leases and security agreements for patents and trademarks. Upon maturity in October 2016, the Series A
secured notes were refinanced with Series C secured notes from the same lender. Terms of the Series C
secured notes are the same as the Series A secured notes other than the Series C secured notes bear interest
at 3.7% and mature in October 2026.
The Series B secured notes were issued on May 22, 2015. The non-amortizing notes bear interest at 4.4%
payable quarterly and mature on May 22, 2025. Collateral for the Series B secured notes and term loans ranks
pari passu and include a general security agreement over all assets, first position collateral mortgages on land
and buildings, assignments of rents and leases and security agreements for patents and trademarks.
The Term A secured loan was issued on May 20, 2015 and matures on May 19, 2019. The facilities bear interest
at BA plus 2.5% per annum based on performance calculations. Interest on the non-amortizing loan has been
fixed at 3.8% through an interest rate swap contract [note 21]. Collateral for the Term A loan and secured notes
ranks pari passu and include a general security agreement over all assets, first position collateral mortgages on
land and buildings, assignments of rents and leases and security agreements for patents and trademarks.
The Term B secured loan was issued on May 20, 2015 and matures on May 19, 2022. The facilities bear interest
at BA plus 2.5% per annum based on performance calculations. Interest on the non-amortizing loan has been
fixed at 4.3% through an interest rate swap contract [note 21]. Collateral for the Term B loan and secured notes
ranks pari passu and include a general security agreement over all assets, first position collateral mortgages on
land and buildings, assignments of rents and leases and security agreements for patents and trademarks.
AGI has revolver facilities of $105 million and U.S. $45 million. The facilities bear interest at prime plus 0.2% to
prime plus 1.75% per annum based on performance calculations. As at September 30, 2016, there was $15
million [December 31, 2015 – nil] outstanding under these facilities. The facilities mature on May 19, 2019.
[c] Covenants
AGI is subject to certain financial covenants in its credit facility agreements that must be maintained to avoid
acceleration of the termination of the agreement. The financial covenants require AGI to maintain a debt to
earnings before interest, taxes, depreciation and amortization [“EBITDA”] ratio of less than 3.25 and to provide
debt service coverage of a minimum of 1.0. The covenant calculations exclude the convertible unsecured
subordinated debentures from the definition of debt. As at September 30, 2016 and December 31, 2015, AGI
was in compliance with all financial covenants.
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