RGC RESOURCES INC Debt Disclosure
| 6. | LINE-OF-CREDIT |
The Company had been operating with a line-of-credit in the principal amount of $25 million that it renewed annually each March. On March 31, 2025, Roanoke Gas amended its line-of-credit to increase the principal amount to $30 million and extend the maturity date to March 31, 2027. The line-of-credit's variable interest rate is based upon Term SOFR plus 1.25% and provides for multiple-tier borrowing limits to accommodate seasonal borrowing demands. The Company's total borrowing limits during the term of the line-of-credit range from $20 million to $30 million. As of September 30, 2025, the Company had an outstanding balance of $11,916,760 under the line-of-credit.
The Company's total available borrowing limits for the remaining term are as follows:
| Available | |||||
| Line-of-Credit | |||||
| As of September 30, 2025 | $ | 20,000,000 | |||
| October 1, 2025 through March 31, 2026 | 30,000,000 | ||||
| April 1, 2026 through September 30, 2026 | 20,000,000 | ||||
| October 1, 2026 through March 31, 2027 | 30,000,000 | ||||
A summary of the line-of-credit follows:
| September 30 | ||||||||
| 2025 | 2024 | |||||||
| Borrowing limit at year-end | $ | 20,000,000 | $ | 20,000,000 | ||||
| Outstanding balance at year-end | 11,916,760 | 11,166,181 | ||||||
| Average rate of interest during year on outstanding balances | 5.56 | % | 6.39 | % | ||||
| Interest rate at year-end | 5.42 | % | 6.29 | % | ||||
| Interest rate on unused line-of-credit | 0.25 | % | 0.15 | % | ||||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.