Pinnacle Agriculture Agrees To Credit Agreement Amendment

Pinnacle Operating Corp. has entered into an amendment (the “Amendment”) to its First Lien Credit Agreement that will provide for, among other things, a three-year extension of maturity on the Extending Term Loans to November 2021, a 3.5% increase in the interest rate on the Extending Term Loans and certain modifications to covenants and other provisions in the First Lien Credit Agreement that are intended to benefit the lenders.

The Amendment was agreed to in connection with a financial recapitalization plan that will reduce Pinnacle’s overall debt, reduce cash interest costs, increase the Pinnacle’s liquidity and strengthen its overall capital structure (the “Recapitalization”). The Recapitalization is expected to reduce Pinnacle’s consolidated debt by approximately $200 million, reduce Pinnacle’s annual debt service costs by over $5 million and result in a capital infusion of more than $125 million into Pinnacle Agriculture Enterprises, LLC. The new capital investment will be provided by funds affiliated with Apollo Global Management, LLC (“Apollo”), certain existing creditors of Pinnacle, certain members of the Pinnacle management team, and other new investors. The agreement to the Amendment by lenders holding over 90% of the Loans satisfies one of the conditions precedent to the Amendment’s effectiveness. The Amendment is also conditioned on, among other things, consummation of the Recapitalization, the agreement of holders of at least 90% of Pinnacle’s 9.00% Second Lien Senior Secured Notes due 2020 (the “Second Lien Notes”) to exchange their notes for new secured notes maturing May 15, 2023 and preferred stock, and an extension of 90% of the commitments under Pinnacle’s ABL facility to May 15, 2020. The Recapitalization and Amendment are expected to close concurrently on or before March 15, 2017.

The Recapitalization also currently has the support of holders of approximately 80% of the outstanding principal amount of Second Lien Notes pursuant to a Recapitalization Support Agreement that, subject to the terms and conditions set forth therein, provides for new investment commitments of more than $125 million, backstopped by investment funds affiliated with Apollo, certain existing creditors of Pinnacle, as well as certain members of the Pinnacle management team. After the Recapitalization, Apollo will remain the majority shareholder of Pinnacle.

Pinnacle expects to announce additional support for the Recapitalization in the coming days.

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