6.DEBT FINANCING

Debt financing consists of the following:


	January 31, 2016		October 31, 2015
	(unaudited)
Revolving term loan to lending institution, see terms below	$	5,776,421	$	4,822,777
Assessments payable		1,954,059		1,963,405
Note payable to electrical company		125,000		143,750
Note payable to noncontrolling interest member of Agrinatural		266,000		300,000
Total		8,121,480		7,229,932
Less amounts due within one year		584,674		517,957
Net long-term debt	$	7,536,806	$	6,711,975

Revolving Term Loan

The Company has a revolving term loan with a lender initially totaling $28,000,000. 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. 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 January 31, 2016 was $24,500,000 and was reduced again at March 1, 2016 to $21,000,000. 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 outstanding balance on the revolving term loan totaled approximately $5,776,000 and $4,823,000 at January 31, 2016, and October 31, 2015, respectively. The interest rate on the revolving term loan was 3.69% and 3.45% at January 31, 2016, and October 31, 2015, 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.

In October 2003, the Company entered into an industrial water supply development and distribution agreement with the City of Heron Lake, Jackson County, and Minnesota Soybean Processors. In consideration of this agreement, the Company and Minnesota Soybean Processors are allocated equally the debt service on $735,000 in water revenue bonds that were issued by the City to support this project that mature in February 2019. The parties have agreed that prior to the scheduled expiration of the agreement, they will negotiate in good faith to replace the agreement with a further agreement regarding the wells and related facilities. In May 2006, the Company entered into an industrial water supply treatment agreement with the City of Heron Lake and Jackson County. Under this agreement, the Company pays monthly installments over 24 months starting January 1, 2007 equal to one years' debt service on approximately $3.6 million in water revenue bonds, which will be returned to the Company if any funds remain after final payment in full on the bonds and assuming we comply with all payment obligations under the agreement. As of January 31, 2016 and October 31, 2015, there was a total of approximately $1,954,000 and $1,963,000, respectively, in outstanding water revenue bonds. The Company classifies its obligations under these bonds as assessments payable. The interest rates on the bonds range from 0.50% to 8.73%.

Estimated annual maturities of debt at January 31, 2016 are as follows based on the most recent debt agreements:


2016	$	584,674
2017		462,086
2018		333,015
2019		307,709
2020		326,798
After 2020		6,107,198
Total debt	$	8,121,480