Debt Arrangements

3 Months Ended

Jun. 30, 2020

The following summarizes debt and notes payable:


							June 30, 2020
	Outstanding						Lines and
	March 31,		June 30,		Letters		Interest
(in thousands)	2020		2020		Available		Rate
Senior secured credit facility:
ABL facility	$	44,900	$	—	$	—	4.1	%	(1)
Senior notes:
8.5% senior secured first lien notes ⁽²⁾	272,871		273,377		—		8.5	%
9.875% senior secured second lien notes ⁽³⁾	630,737		635,686		—		9.9	%
Other long-term debt	856		3,385		387		8.0	%	(1)
Notes payable to banks ⁽⁴⁾	540,157		524,266		234,953		6.6	%	(1)
DIP Financing	—		131,700		75,000		11.9	%
Total debt	$	1,489,521	$	1,568,414	$	310,340
Short-term	540,157		655,966
Long-term:
Current portion of long-term debt	$	45,048	$	273,524
Long-term debt	904,316		3,238
	$	949,364	$	276,762
Debt subject to compromise:
9.875% senior secured second lien notes ⁽³⁾	$	—	$	635,686

Letters of credit	7,027		5,880		2,765
Total credit available					$	313,105

(1) Weighted average rate for the trailing twelve months ended June 30, 2020.
(2) Repayment of $273,377 is net of original issue discount of $517 and unamortized debt issuance costs of $1,106. Total repayment will be $275,000.
(3) Upon commencement of the Chapter 11 Cases on June 15, 2020, the carrying amount of the Second Lien Notes was adjusted to write-off the original issue discount of $2,305 and the unamortized debt issuance costs of $1,715 to reorganization items. The Second Lien Notes are classified as liabilities subject to compromise within the condensed consolidated balance sheets as of June 30, 2020.
(4) Primarily foreign seasonal lines of credit.

Debtor-in-Possession Financing

The commencement of the Chapter 11 Cases on June 15, 2020 constituted an event of default, and caused an automatic and immediate acceleration of repayment obligations under the First Lien Notes, the Second Lien Notes, and the ABL Facility.

However, any efforts to enforce such payment obligations are automatically stayed as of the Petition Date, and are subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Borrowings under the ABL Facility were not available commencing on the Petition Date as a result of this event of default.

In June 2020, the Company drew down $131,700 in initial funding from the DIP Facility. The proceeds from the DIP Facility were used to (a) pay down the outstanding amount drawn on the ABL Facility of $44,900; (b) pay related transaction costs, fees, and expenses associated with the repayment and termination of the ABL Facility; (c) provide working capital for other general corporate purposes in accordance with the Budget; (d) make adequate protection payments as authorized by the Bankruptcy Court in the DIP Order; (e) pay obligations arising from or related to the Carve Out (as defined below); and (f) pay restructuring costs incurred in connection with the Chapter 11 Cases. Drawn amounts under the DIP Facility bear interest at either (1) an Alternate Base Rate plus 9.25%, per annum or (2) 10.25% plus the LIBOR Rate, per annum, with a LIBOR floor of 1.5%. Undrawn amounts under the DIP Facility are subject to a ticking fee of 3.0% per annum calculated on a daily basis on the aggregate daily unused amount, accruing commencing on June 17, 2020 and until such commitments have terminated, which ticking fee is due and payable in arrears on the earlier to occur of a borrowing upon entry of a final order and the date on which such commitments have terminated. During the continuance of an event of default (as further described in the DIP Credit Agreement), the overdue amounts under the DIP Facility bear interest at an additional 2% per annum above the interest rate otherwise applicable.

The maturity date of the DIP Facility is the earliest of (a) December 17, 2020; (b) the date of the substantial consummation (as defined in Section 1101(2) of the Bankruptcy Code) of a plan of reorganization; (c) the date on which Pyxus and its subsidiaries consummate a sale of all or substantially all of their assets pursuant to section 363 of the Bankruptcy Code or otherwise; or (d) such earlier date on which the loans shall become due and payable by acceleration or otherwise in accordance with the terms of the DIP Credit Agreement and the other related documents.

Under the DIP Facility, the DIP Lenders and Cortland Capital Market Services LLC, as collateral agent, subject to the Carve Out and the terms of the DIP Order and, in each case, other than certain excluded assets, are at all times secured, by (i) a first priority senior priming security interest in and lien upon the DIP Priming Collateral (as defined in the DIP Order); (ii) a first priority senior security interest in and lien upon the DIP Priority Collateral (as defined in the DIP Order), and (iii) a junior security interest in and lien upon DIP Junior Collateral (as defined in the DIP Order). The DIP Lenders and collateral agent are also secured by security interests in substantially all of the assets of certain non-debtor subsidiaries of Pyxus. The Debtors’ obligations to the DIP Lenders and the liens and superpriority claims are subject in each case to a carve out (the “Carve Out”), subject to a cap, that accounts for certain statutory fees, committee professional fees and post-notice professional fees payable in connection with the Chapter 11 Cases.

The DIP Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default, including, but not limited to, payment defaults, material inaccuracy of representations and warranties, covenant defaults, certain events under the Employee Retirement Income Security Act of 1974 and change of control. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code and certain other events related to the impairment of the DIP Lenders’ rights or liens granted under the DIP Credit Agreement.

Upon the effectiveness of the Plan, claims under the DIP Facility are satisfied in the manner set forth in the Plan and the DIP Facility terminates. Refer to "Note 22. Subsequent Events" for more information.

Foreign Seasonal Lines of Credit

On May 19, 2020, the Company amended the terms of its $105,000 of foreign seasonal lines of credit with the Standard Bank of South Africa Limited (“Standard”). The amendment reduced the total credit limit to $85,000 and changed the maturity date from April 30, 2020 to March 31, 2021 or May 1, 2021, depending on the line of credit.

On June 29, 2020, the Company amended the terms of its $255,000 of the original aggregate maximum borrowing availability under the existing foreign seasonal lines of credit with Eastern and Southern African Trade and Development Bank (“TDB”). The amendment changed the anniversary date for renewal to July 31, 2020 and extended the review period for subsequent renewals from March 31, 2020 to July 31, 2020.