Slide 1

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 2

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 3

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 4

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 5

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 6

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 7

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 8

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 9

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 10

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 11

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 12

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 13

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 14

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 15

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 16

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 17

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 18

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 19

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 20

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 21

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 22

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 23

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 24

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 25

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 26

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 27

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 28

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.


Slide 29

Real Relationships. Real Results.

Operating Credits
Don Zack, Client Relationship Manager
Brian O’Neill, Credit Solutions Manager

Real Relationships. Real Results.

Borrowing Solutions
• Operating and Revolving Lines
of Credit
• Term Loans
• Scotia Leasing

Real Relationships. Real Results.

Operating Line of Credit
Qualification(Information needed):
• 3 years Financial Statements;
• Detailed Capital Asset Lists (land,
buildings, machinery/equipment;
including market values)

Real Relationships. Real Results.

• Current year interim financials
• Current listing of inventory, accounts
receivable and accounts payable.
• Farm Production Plan
• Farm Cash Flow Projection

Real Relationships. Real Results.

Features of an Operating
Credit:
• Terms
• Security
• Conditions

Real Relationships. Real Results.

Terms
(A Sample Credit Agreement)
Authorized Amount
$5,000,000
Type of Credit
Operating

Real Relationships. Real Results.

Purpose
General operating requirements (ie.

feeder cattle purchase, feed grains,
seed, chemical, fertilizer, labour, etc)
Availment

Direct advances evidenced by
Agreement re Operating Credit Line;
and/or Bankers’ Acceptances in

Canadian dollars

Real Relationships. Real Results.

Interest Rate / Acceptance Fee
The Bank's Prime Lending Rate from
time to time with interest payable
monthly.
Bankers' Acceptance Fee of 1.25% per
annum
Repayment
Advances are repayable on demand.

Real Relationships. Real Results.

Security:
Security under Section 427 of the Bank Act
over crops/feed and livestock (with
appropriate insurance coverage, loss, if any,
payable to the Bank)
General Security Agreement over all present
and future personal property with appropriate
insurance coverage, loss if any, payable to
the Bank.

Real Relationships. Real Results.

Conditions:
Borrowing Base
Operating advances, Bankers’ Acceptances
and outstanding cheques, are not to exceed at
any time the lesser of the operating limit and
the "Borrowing Base" which is defined as the
aggregate of:

Real Relationships. Real Results.

a)

75% of good quality accounts receivable
(excluding accounts over 90 days,
accounts due by employees, offsets and
inter-company accounts), plus;

b)

75% of the net of livestock inventory less
livestock payables, valued at the lower of
cost or market, plus;

Real Relationships. Real Results.

c)

75% of the net of feed inventory (excluding
seed, chemicals, fertilizers) less feed
payables, valued at the lower of cost or
market, less

d)

security interests or charges held by other
parties and specific payables which have or
may have priority over the Bank's security.

Real Relationships. Real Results.

SAMPLE BORROWING
BASE
(test security values)

Real Relationships. Real Results.

Inventory List (provided Monthly, Quarterly)
1000 head x 1000lbs x $.90/lb

=

$900,000

2000 tonne barley silage x $50/tonne

=

$100,000

1000 tonne feed corn x $200/tonne

=

$200,000

=

$1,200,000

TOTAL

Real Relationships. Real Results.

Accounts Receivable:
Cattle
Crop Insurance

=
=

$300,000
$100,000
$400,000

=
=

$50,000
$150,000
$200,000

Accounts Payable:
Corn
Cattle

Operating Credit o/s balance =

$750,000

Real Relationships. Real Results.

Borrowing Base Calculation:
Inventory:
($1,200,000 - $200,000) = $1,000,000
x 75% = $750,000
plus
Account Receivable:
$400,000
x 75% = $300,000

Borrowing Base

= $1,050,000

Real Relationships. Real Results.

Borrowing Base
less
Operating Credit
Result:

$1,050,000

($ 750,000)

surplus of $ 300,000

Real Relationships. Real Results.

Supplementary
information to compliment
operating credits:

Real Relationships. Real Results.

Currency of Trade:
Options in CAD and USD
Each currency option requires
a complimentary current or
checking account.

Real Relationships. Real Results.

Borrowing options under
each currency:
CAD-CDN prime rate or
Banker’s Acceptances.
USD-USA prime rate or LIBOR
(London Interbank Offered
Rate).

Real Relationships. Real Results.

Borrowing options:
1) Overdraft - checking account
with a borrowing limit
established based on limit;

Real Relationships. Real Results.

2) Operating loan - separate
operating loan (limit based on
global limit or the borrowing
base) established and linked
to the checking account with
money management service
(electronic movement of
funds).

Real Relationships. Real Results.

Risk Management:
1-currency;
2-interest rates;
3-commodity.

Real Relationships. Real Results.

Currency: ScotiaCapital
(division of Scotiabank)
offers spot, forwards and
swap transactions.

Real Relationships. Real Results.

Interest rates: (Term and
Lease rates can be fixed,
but operating credits
generally float)

Real Relationships. Real Results.

USD - LIBOR rates are
quoted in 1 week, 1, 2, 3,
6 & 12 month periods and
also in 3-5 year intervals.

Real Relationships. Real Results.

CAD risk management is
found in BA options of 30180 day expiries.
Additional risk management
found in capital market
products of BA or prime rate
collars or caps (Scotia
Capital).

Real Relationships. Real Results.

Commodity Risk
Management (provided by
Scotia McLeod):
Provide market products to
manage risk on both input
or production.

Real Relationships. Real Results.

Real Relationships. Real Results.