By Ian Gilson, PhD, CFA
S&W Seed (SANW) has entered into a credit agreement with Well Fargo Bank for a new working capital agreement for $4 million in domestic credit and $10 million for export related accounts receivables and inventory. The terms are 2.25% over LIBOR and (as is normal) must be paid in full before April 1, 2015. There is a fee of $100,000 for the transaction.
These are normal working capital lines of credit except the facilities are backed by a lien on the stock of Seed Genetics International.
The full amount of the credit may never be used. It is a "security blanket" behind the inventory and accounts receivable in case of any problems.
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