Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

2021 Bond Issuance

On April 15, 2021, on behalf of Gevo NW Iowa RNG, LLC, the Iowa Finance Authority ("the "Authority") issued $68,155,000 of its non-recourse Solid Waste Facility Revenue Bonds (Gevo NW Iowa RNG, LLC Renewable Natural Gas Project), Series 2021 (Green Bonds) (the "2021 Bonds") for NW Iowa RNG. The bond proceeds are being used as a source of construction financing alongside equity from the Company. The bonds were issued under a Trust Indenture dated April 1, 2021 (the "Indenture") between the Authority and Citibank, N.A. as trustee (the "Trustee"). The 2021 Bonds mature April 1, 2042. The bonds initially bear interest at 1.50% per annum during the Initial Term Rate Period, (as defined in the Indenture), payable semi-annually on January 1 and July 1 of each year. The effective interest rate is 1%. The bonds are supported by a $71.2 million irrevocable direct pay letter of credit (the "Letter of Credit") with a 1/2% annual fee, paid quarterly. The Letter of Credit expires April 4, 2024 (unless terminated earlier), and was issued by Citibank N.A. The Trustee can draw sufficient amounts on the Letter of Credit to pay the principal and interest until the first mandatory tender date of April 1, 2024. The bonds are callable and re-marketable on or after October 1, 2022. If the bonds have not been called and re-marketed by the first mandatory tender date, the Trustee may draw on the Letter of Credit to repay the bonds in their entirety at the purchase price. Gevo deposited $71.2 million with the Trustee as restricted cash to secure any amounts drawn under the Letter of Credit. As of June 30, 2022, no amounts have been drawn under the Letter of Credit.

Gevo anticipates re-marketing the 2021 Bonds in the fall of 2022 under revised terms that will include a long-term maturity date and be non-recourse to Gevo. Upon a successful remarketing, Gevo anticipates that the Letter of Credit, the associated reimbursement agreement and the associated pledge of cash will be terminated, with a concurrent release of the restricted cash securing the Letter of Credit.

The 2021 Bonds were issued at a premium of $0.8 million and debt issuance costs were $3.0 million. The bond debt is classified as long-term debt and is presented net of the premium and issuance costs, which are being amortized over the life of the bonds using the interest method. As of June 30, 2022, the premium balance and the debt issuance cost net of amortization were $0.5 million and $1.9 million, respectively.

Restricted cash and cash equivalents. The Company’s restricted cash and cash equivalents consists of unused proceeds from the issuance of the 2021 Bonds and are restricted for the purpose of constructing NW Iowa RNG projects as well as amounts pledged and assigned to the Trustee in its capacity as provider of the Letter of Credit as collateral for the reimbursement obligations of Gevo.

The proceeds from issuance of the 2021 Bonds are maintained by the Trustee under the Indenture and are released to the Company only to pay costs of the construction of NW Iowa RNG. The Company has used $63.8 million for the project. As of June 30, 2022, unused bond proceeds of $5 million are included in restricted cash and classified as current since the proceeds will be distributed within 12 months.

As of June 30, 2022, $71.2 million is held in restricted cash as collateral for the Letter of Credit. The Company is entitled to receive interest income on the restricted cash.

The restricted cash held by the Trustee is made up of the following (in thousands), which amounts are reflected since inception and as of, as applicable:

	June 30, 2022
Bond proceeds	$	68,995
Disbursement of funds	(63,809)
Interest paid on bonds	(727)
Funds transferred to current restricted assets (to pay interest on bonds)	413
Interest income	—
Total restricted bond cash held by Trustee	4,872
Restricted cash for bond collateral held by Trustee	71,278
Total restricted cash held by Trustee	76,150
Current restricted cash held by Trustee	(5,894)
Long-term restricted cash held by Trustee	$	70,256

Loans Payable - Other

The equipment loans are secured by the related equipment.

In April 2020, the Company and Agri-Energy each entered into a loan agreement with Live Oak Banking Company, pursuant to which the Company and Agri-Energy obtained loans from the Small Business Administration's Paycheck Protection Program (“SBA PPP”) totaling $1.0 million in the aggregate (the "SBA Loans").

In April 2021, the Small Business Administration forgave the entire balance of $0.5 million of the Company's and $0.1 million of Agri-Energy's loans and accrued interest obtained through the SBA PPP. The remaining SBA Loan for Agri-Energy totals $0.3 million, bears interest at 1.0% per annum and matures in April 2025. Monthly payments of $8,230, including interest, began on June 5, 2021, and are payable through April 2025.

The summary of the Company's long-term debt is as follows (in thousands) as of:

	Interest Rate			Maturity Date			June 30, 2022		December 31, 2021
2021 Bonds	1.5%			January 2042			$	66,853	$	66,486
SBA Loans	1.0%			April 2025			272		320
Equipment	4%	to	5%	February 2022	to	December 2024	124		156
Total loans payable - other							67,249		66,962
Less current portion							(158)		(158)
Long-term portion							$	67,091	$	66,804

Future principal payments for the Company's long-term debt are as follows (in thousands):

Year Ending December 31,	Total Debt
2022 (remaining)	$	78
2023	159
2024	66,983
2025	29
2026	—
Total loans payable - other	$	67,249