DEBT FACILITIES

Granite Falls Energy:

GFE has a credit facility with a lender. This is a revolving term loan facility in the amount of $18,000,000. However, the amount available for borrowing under this facility reduces by $2,000,000 semi-annually beginning September 1, 2014, with final payment due March 1, 2018. Therefore, at October 31, 2015, the amount the Company may borrow under this facility is $12,000,000.

The interest rate is based on the bank's One Month London Interbank Offered Rate (“LIBOR”) Index Rate, plus 3.05%. There was no outstanding balance on the revolving term loan on October 31, 2015 and October 31, 2014.

The credit facility requires GFE to comply with certain financial covenants. As of October 31, 2015 and 2014, GFE was in compliance with these financial covenants and expects to be in compliance throughout fiscal 2016.

The credit facility is secured by substantially all assets of the Company.

At October 31, 2015, GFE also had letters of credit totaling approximately $289,000 with the bank as part of a credit requirement of Northern Natural Gas. Subsequent to our fiscal year end, Norther Natural Gas waived this credit requirement and the letters of credit were cancelled and are no longer outstanding.

Heron Lake BioEnergy:

Revolving Term Note

The Company has a revolving term loan with a lender initially totaling $28,000,000. Under the terms of the credit facility, the revolving term loan commitment declines by $3,500,000 annually, starting March 1, 2015 and continues each anniversary thereafter until maturity. Therefore, the amount available on this facility at October 31, 2015 was $24,500,000. Amounts borrowed by the Company under the revolving term loan and repaid or prepaid may be re-borrowed at any time prior to the March 1, 2022 maturity date. Interest on the revolving term loan accrues at a variable rate equal to 3.25% above the One-Month London Interbank Offered Rate (“LIBOR”) Index rate. The Company may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. The Company also agreed to pay an unused commitment fee on the unused portion of the revolving term loan commitment at the rate of 0.50% per annum. The revolving term loan is subject to a prepayment fee for any prepayment on the term loan prior to July 1, 2016 due to refinancing. The credit facility contains customary covenants. The loan is secured by substantially all of the Company assets including a subsidiary guarantee. The interest rate on the revolving term loan was 3.45% and 3.41% at October 31, 2015, and October 31, 2014, respectively.

As part of the Credit Facility closing, the Company entered into an Administrative Agency Agreement with CoBank, ACP (“CoBank”). CoBank purchased a participation interest in the AgStar loans and was appointed the administrative agent for the purpose of servicing the loans. As a result, CoBank will act as the agent for AgStar with respect to the Credit Facility. The Company agreed to pay CoBank an annual fee of $2,500 as the agent for Ag Star.

Long-term debt consists of the following:



	October 31, 2015		October 31, 2014
GRANITE FALLS ENERGY:
Revolving Term Loan	$	—	$	—

HERON LAKE BIOENERGY:
Revolving term note payable to lending institution, see terms above.	4,822,777		—
Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. The Company made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment.	1,775,828		2,018,767
Assessment payable as part of water treatment agreement, due in semi-annual installments of $25,692 with interest at 0.50%, enforceable by statutory lien, with the final payment due in 2016.	51,199		102,074
Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019.	136,378		172,072
Note payable to electrical company with monthly payments of $6,250 with interest at 0.00% and a 1.00% maintenance fee due each October, due September 2017. The electrical company is a member of the Company.	143,750		218,750
Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%. The note is considered due on demand with payments due at Agrinatural Board of Managers discretion.	300,000		300,000
Equipment payable on corn oil separation equipment from a vendor. The Company paid approximately $40,000 per month conditioned upon revenue generated from the corn oil equipment. The monthly payment included implicit interest of 5.57%. This note was paid in full in February 2015.	—		146,984
Totals	7,229,932		2,958,647
Less amounts due within one year	517,957		846,235
Net long-term debt	$	6,711,975	$	2,112,412

Estimated maturities of long-term debt at October 31, 2015 are as follows:



2016	$	517,957
2017	480,064
2018	432,182
2019	319,376
2020	326,798
After 2020	5,153,555
Total debt	$	7,229,932