Attached files
Series A Convertible Subordinated Notes
Southwest Iowa Renewable Energy, Inc. (“we” or “us”) intends to
register the sale of Series A Convertible Subordinated Notes (the
“Notes”). The Notes are not registered under the Securities Act
of 1933 (the “Act”), or any applicable state securities laws, and
may not be offered or sold in the United States absent
registration under or an applicable exemption from the Act,
and applicable state securities laws. When so registered or
exempted, we currently intend to offer the Notes primarily to our
existing security holders. The offering is expected to contain the
following basic terms and conditions, which are subject to
completion and change:
register the sale of Series A Convertible Subordinated Notes (the
“Notes”). The Notes are not registered under the Securities Act
of 1933 (the “Act”), or any applicable state securities laws, and
may not be offered or sold in the United States absent
registration under or an applicable exemption from the Act,
and applicable state securities laws. When so registered or
exempted, we currently intend to offer the Notes primarily to our
existing security holders. The offering is expected to contain the
following basic terms and conditions, which are subject to
completion and change:
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Purpose
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(i) To provide holders of Series A Units
limited protection from dilution occurring in the event of the potential conversion of certain of our existing and future subordinated debt into Units. (ii) To use the proceeds of the offering to
reduce the amount of subordinated debt held by other parties. |
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Securities Offered By
Us |
Series A Convertible Subordinated Term
Notes which are convertible into our Series A Units (“Units”). |
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Minimum Purchase
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Notes will be sold in the minimum purchase
amount of $15,000, and integral increments of $3,000 thereafter. |
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Interest and Payment
Dates |
Holders of the Notes (the “Holders”) will be
paid interest at a rate of 7.5% over the six- month LIBOR on January 31 and July 31 of each year. The Company has the right to pay all interest in-kind, meaning interest will be added to the outstanding principal of the Notes. |
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Maturity Date
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August 31, 2014
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Conversion Rights of
Note Holders |
The Notes are convertible, at the option of
the Holder, on January 31 and July 31 of each year, into Series A Units, in the minimum principal amount of $15,000, and integral increments of $3,000 thereafter, at a conversion price of $3,000 per Unit. |
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Redemption
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The Notes can be redeemed by the
Company at any time upon specified advance written notice of such redemption. Upon redemption, the Company shall pay the Holder of the Note(s) being redeemed all or a portion of the outstanding principal balance and any accrued but unpaid interest. |
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Ranking
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The Notes are unsecured and are
subordinated to our outstanding senior indebtedness and equal to our outstanding subordinated indebtedness. As of December 31, 2009, we had approximately $118,425,000 of senior secured debt and approximately $35,900,000 of subordinated debt. We also have outstanding a bridge loan, which, with accrued interest and related costs, may be converted into subordinated date on terms comparable to the Notes, in the amount of approximately $9,000,000. |
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Outstanding
Subordinated Debt |
We currently have outstanding $35,900,000
of subordinated debt issued on substantially the same terms as the Notes. We also have outstanding a bridge loan, which, with accrued interest and related costs, may be converted into subordinated debt on terms comparable to the Notes, in the amount of approximately $9,000,000. Proceeds of the Notes will be used to reduce the subordinated debt otherwise held by third parties. |
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Plan of Distribution
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When the Notes have been registered with
the Securities and Exchange Commission and the State of Iowa, we contemplate selling them on a best efforts basis and without the assistance of any broker, placement agent or finder, primarily to our members. We may also offer the Notes privately in other states in accordance with private offering exemptions under state blue sky laws. |
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