Pacific Ethanol, a producer and marketer of low-carbon renewable fuels, is refinancing its $155.1 million principal term debt via transactions with CoBank, First Farm Credit and Wells Fargo.

Pacific Ethanol has obtained a new five-year term amortizing loan from CoBank and First Farm Credit in the amount of $64 million and a revolving line of credit of $32 million secured by its Pekin assets. This loan bears interest at LIBOR+3.75%.

Pacific Ethanol also entered into an agreement with the Aurora Cooperative Elevator Company (ACEC), whereby it will contribute its Aurora plant assets into a newly created company, Pacific Aurora (PAL) and ACEC will simultaneously contribute its Aurora West Grain Elevator, loop track, related land and other assets into PAL.

Under this agreement, Pacific Ethanol will sell a 14% interest in PAL to ACEC for $30 million in cash. These transactions will result in Pacific Ethanol owning 74% and ACEC owning 26% of the combined ethanol production, grain elevator and rail facilities in Aurora, NE.

To further strengthen liquidity, PAL will obtain a five-year amortizing, revolving term loan of $30 million from CoBank secured by PAL’s assets. This loan will bear interest at LIBOR+4.00%.

Pacific Ethanol will use these combined proceeds to repay the $155.1 million in outstanding principal and accrued and unpaid interest owed under the terms of its existing term loans. The debt refinancing reduces total debt outstanding by more than $12 million and reduces annual interest costs by over $8 million.

Pacific Ethanol, in connection with the refinancing, also increased its subsidiary Kinergy’s line of credit facility with Wells Fargo by $10 million, from $75 million to $85 million, to provide additional liquidity.