Gevo RNG Subsidiary Successfully Remarkets Its Tax-Exempt Green Bonds

ENGLEWOOD, Colo., April 01, 2024 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ: GEVO) announced today that its wholly-owned subsidiary, Gevo NW Iowa RNG, LLC (“Gevo RNG”), has remarketed the previously issued and currently outstanding Iowa Finance Authority Solid Waste Facility Revenue Bonds (Gevo NW Iowa RNG, LLC Renewable Natural Gas Project), Series 2021 (Green Bonds) (the “Bonds”), which are tax exempt “Green Bond” private activity bonds the proceeds of which were used to finance construction of Gevo RNG’s now operating and expanded renewable natural gas (“RNG”) assets in Northwest Iowa.

The Bonds were initially issued by the Iowa Finance Authority on April 15, 2021 in a public offering for the benefit of Gevo RNG and for an initial term rate period ending March 31, 2024. The Bonds were issued in the aggregate principal amount of approximately $68.2 million with an interest rate of 1.5% and were secured by an irrevocable direct pay letter of credit for $71.2 million. On April 1, 2024 (the “Conversion Date”), the Bonds became subject to mandatory tender for purchase and have been remarketed to bear interest at 3.875% for a new term rate period ending March 31, 2026. The remarketed bonds are secured by an irrevocable direct pay letter of credit for approximately $69.6 million. Gevo’s reimbursement obligations with respect to the letter of credit are fully cash collateralized. Gevo expects that the interest income on cash collateral will be greater than the interest expense on the Bonds, resulting in positive contribution to cash flow over the next twelve months.

“We were pleased to benefit from a low fixed interest rate on the Bonds after the remarketing, while enjoying the benefit of increased interest income on the restricted cash on the balance sheet, which secures Gevo’s reimbursement obligations with respect to the letter of credit for the Bonds,” said Lynn Smull, Chief Financial Officer of Gevo. “The Bonds had a mandatory tender date of April 1, 2024 that required us to either tender the bonds or convert and remarket them to bear interest at current rates. Thanks to a well-executed process we were able to conclude the remarketing with an attractive Bond interest rate.”