SBT Bancorp, Inc. (OTCPK:SBTB) announced that it has entered into a subordinated loan agreement for a private placement of an unsecured subordinated term note for principal gross proceeds of $7,500,000 on September 30, 2015. The transaction will include participation from new investor, Community Funding CLO, Ltd. The note will bear interest at a fixed rate of 6.75% per annum, provided, however, that for the period beginning immediately after the closing date through, but not including, February 11, 2016, the investor will rebate an amount equal to 3.40% per annum to the company, resulting in a rate of 3.35% per annum to the company, net of any payments of interest made, so long as no event of default has occurred or is occurring during such period. The interest on the note will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on the first such date following the closing date and on the maturity date.

The principal amount of the note is due on October 1, 2025, provided, that the company may prepay all or a portion of the principal amount of the note on or after the fifth anniversary of the closing date. As part of the transaction, prior to the fifth anniversary of the closing date, the company can prepay all or a portion of the principal amount of the note only under limited specified circumstances. The company will pay a closing fee equal to 3% of the aggregate principal amount of the term loan borrowed, payable to initial lender or to such other person as directed by the initial lender on the closing date.

The net proceeds from the transaction will be $7,245,500.