Craig Cassera

Craig Cassera inquired about the status of two FPI loans scheduled to mature at the end of January, asking if they were repaid or extended, and whether there is continued strong demand for the FPI loan program. He also asked about the significance of a lease transitioning from fixed to variable in Q4 and its terms. Furthermore, he sought an anticipated pricing range for the Term Loan One refinancing maturing in March and asked if the company is seeing attractive acquisition opportunities in the Midwest or Southeast at its current cost of capital.

Answer

CFO Susan Landi confirmed that the FPI loans were extended to September. Executive Chairman Paul Pittman added that demand for the FPI loan program remains strong, viewing it as countercyclical, and they prefer to extend loans if collateral is solid. President and CEO Luca Fabbri stated that the lease transition from fixed to variable was not particularly significant and was a one-year extension on a California farm that has since been disposed of. Ms. Landi anticipated Term Loan One would reprice around 5.3%, which Mr. Fabbri noted is in line with market conditions. Mr. Pittman indicated that while pricing isn't significantly down in the Midwest, the company prioritizes creating shareholder value through disciplined acquisitions or dispositions rather than growth for growth's sake.

Craig Cassera from Raymond James Capital Markets inquired about the status of two FPI loans maturing in January, the demand for the FPI loan program, and the significance of a lease transitioning from fixed to variable payments in Q4. He also asked about the anticipated repricing of Term Loan One maturing in March and the attractiveness of current market pricing for potential acquisitions in the Midwest or Southeast, considering the company's cost of capital.

Answer

CFO Susan Landi confirmed that the two FPI loans were extended to September. Executive Chairman Paul Pittman noted strong demand for the loan program, expecting it to grow or remain steady due to struggling farmers and strong returns. President and CEO Luca Fabbri stated that the lease transition was not significant to the P&L and was a one-year extension on a disposed California farm. Susan Landi and Luca Fabbri anticipate Term Loan One repricing around 5.3%, in line with market conditions. Paul Pittman indicated that market pricing for acquisitions is not significantly down, with Midwest prices down only 2-3% from peak, and while current yields are not ideal, the company prioritizes shareholder value creation over growth for growth's sake.