Davis Polk advised the administrative agent in connection with an amendment to the first-lien term credit agreement for Pinnacle Operating Corporation. The amendment, which was negotiated in connection with a larger recapitalization transaction for Pinnacle, provides for a three-year extension of maturity with respect to more than 90% of the currently outstanding term loans in exchange for an interest rate increase on the extending loans and certain modified covenants and an enhanced collateral package intended to benefit the lenders. Davis Polk worked closely with a lender steering committee to negotiate the terms of the amendment and recapitalization transaction, which also includes (a) an exchange of more than 90% of the company’s 9.00% second-lien notes due 2020 for new 1.5-lien notes due 2023, (b) an aggregate new-money investment of more than $125 million and (c) an amendment extending the maturity under the company’s ABL facility. The recapitalization was consummated on March 10, 2017.

Pinnacle Operating Corporation is a leading agricultural retail and wholesale distribution business serving growers across 29 states. Pinnacle’s operations include, among other things, seed production and sales, agricultural chemical distribution, bulk handling of fertilizer and general merchandise for the farming, livestock and wildlife industries. Following the recapitalization, affiliates of Apollo Global Management, LLC will remain the majority shareholders of Pinnacle.

The Davis Polk insolvency and restructuring team included partner Damian S. Schaible and associates Aryeh E. Falk, David Schiff and Jacob Weiner. The credit team included partner Jinsoo H. Kim and associates Mayer S. Steinman, Eitan M. Goldberg and Tanya Leykekhman. The real estate team included counsel Susan D. Kennedy and associate Rachel Goodwin. All members of the Davis Polk team are based in the New York office. 

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