v3.26.1
Note 6 - Long-Term Debt
 12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

NOTE 6 - LONG-TERM DEBT

 

On June 21, 2024, Nuvera and CoBank entered into (i) an Agreement Regarding Amendments to Loan Documents and (ii) an Amended and Restated Revolving Loan Promissory Note. The agreements amended our existing credit facility with CoBank and secured a credit facility in the aggregate principal amount of $180.0 million.

 

Under the Agreements, among other things, (i) the Company received a $125.0 million term loan to replace existing debt, (ii) a $25.0 million delayed draw term loan, (iii) the Company’s revolving loan was decreased from $40.0 million to $30.0 million, (iv) the maturity dates of the term loans and revolving loan were set at June 21, 2029, and (v) the Company’s operating subsidiaries agreed to extend their previous guarantees, security interests and mortgages to cover the increased amount of the credit facility. The financing was secured to facilitate the Company’s advanced fiber-build plans announced on December 15, 2021. Refer to the Company’s 8-K filing with the SEC on June 25, 2024, for further details regarding the 2024 credit agreements with CoBank.

 

Under the credit agreement, the Company and its respective subsidiaries have entered into security agreements under which substantially all the assets of Nuvera and its respective subsidiaries have been pledged to CoBank as collateral. In addition, Nuvera and its respective subsidiaries have guaranteed all the obligations under the credit facility. The credit agreement contains certain customary events of default, which include failure to make payments when due, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, or a change in control (as defined in the credit agreement).

 

Secured Credit Facility:

 

2024 Credit Agreement

 

 

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TERM A-1 LOAN - $125,000,000 term note with interest payable quarterly. Final maturity date of this note is June 21, 2029. Eight quarterly principal payments of $781,250 are due commencing June 30, 2026, through March 31, 2028, and four quarterly principal payments of $1,562,500 commencing on June 30, 2028, through maturity date. A final balloon payment of $112,500,000 is due at maturity of this note on June 21, 2029.

 

 

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DELAYED DRAW TERM LOAN - $25,000,000 Delayed Draw Term Loan with interest on any outstanding amounts payable quarterly. Final maturity date of this loan is June 21, 2029. Eight quarterly principal payments of 0.625% of the outstanding loan balance are due commencing June 30, 2026, through March 31, 2028, and four quarterly principal payments of 1.250% of the outstanding loan balance commencing on June 30, 2028, through maturity date. A final balloon payment of the balance of the Delayed Draw Term Loan is due at maturity of this note on June 21, 2029. We currently have drawn $0 on this Delayed Draw Term Loan as of December 31, 2025.

 

 

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REVOLVING LOAN - $30,000,000 revolving loan with interest payable quarterly. Final maturity date of this note is June 21, 2029. We currently have drawn $21,113,839 on this revolving note as of December 31, 2025.

 

The term and revolving loan borrowings initially bear interest at a “Margin for SOFR Loans” of 3.75% above the applicable SOFR. The margin for SOFR loans for term and revolving loans increases as our “Leverage Ratio” increases and decreases as our “Leverage Ratio” decreases.

 

We generally use variable-rate debt to finance our operations, capital expenditures and acquisitions. These variable-rate debt obligations expose us to variability in interest payments due to changes in interest rates. The terms of our credit facility with CoBank require that we enter into interest rate agreements designed to protect us against fluctuations in interest rates, in an aggregate principal amount and for a duration determined under the credit facility.

 

Under the 2024 credit facility, Nuvera can enter into IRSAs in connection with amounts borrowed from CoBank. On September 30, 2025, $43,750,000 of our indebtedness was covered under and IRSA with CoBank. See Note7 – “Interest Rate Swaps” for details regarding our IRSA.

 

Our remaining outstanding debt of $102.4 million remains subject to variable interest rates at an effective weighted average interest rate of 7.32%, as of December 31, 2025.

 

As of December 31, 2025, our additional delayed draw term loan of $25.0 million and unused revolving credit facility of $8.9 million are subject to an unused commitment fee of 0.50% annually, until drawn. Once drawn, this debt would be subject to an effective weighted average interest rate based on current rate of interest in effect at the time.

 

Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends in an amount up to $3,000,000 in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 4.25:1.00 or less. In addition, we are allowed to pay dividends in an unlimited amount in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 3.50:1.00 or less. Our current Total Leverage Ratio as of December 31, 2025, was 4.97. Our maximum Total Leverage Ratio under the loan facility is 6.00:1.00.

 

Our credit facility requires us to comply with specified financial ratios and tests. These financial ratios include Total Leverage Ratio and debt service coverage ratio. On December 31, 2025, we were in compliance with all the stipulated financial ratios in our loan agreements.

 

There are security and loan agreements underlying our current CoBank credit facility that contain restrictions on our distributions to stockholders and investment in, or loans, to others. Also, our credit facility contains restrictions that, among other things, limits or restrict our ability to enter into guarantees and contingent liabilities, incur additional debt, issue stock, transact asset sales, transfers, or dispositions, and engage in mergers and acquisitions, without CoBank approval.

 

Long-term debt is as follows:

  

2025

    

2024

  
                 

Secured five-year reducing credit facility to CoBank, ACB, in quarterly installments of $781,250 (beginning on June 30, 2026) and quarterly installments of $1,562,500 (beginning on June 30, 2028), and a balloon payment of $112,500,000 at maturity of this note on June 21, 2029, plus a notional variable rate of interest through June 21, 2029.

   $ 125,000,000     $ 125,000,000  

Secured five-year revolving credit facility of up to $30,000,000 to CoBank, ACB, plus a notional variable rate of interest through June 21, 2029.

     21,113,839       18,500,823  

Less: Unamortized Loan Fees

     (1,991,497 )     (2,551,751 )
      144,122,342       140,949,072  

Less: Amount due within one year, net of unamortized loan fees

     (1,884,184 )     -  

Total Long Term Debt

   $ 142,238,158     $ 140,949,072  

 

Required principal payments for the next five years are as follows:

 

2026

   $ 2,343,750  

2027

   $ 3,125,000  

2028

   $ 5,468,750  

2029

   $ 135,176,339  

2030

   $ -