Note 6—Debt

The table below provides information about the carrying values and weighted-average effective interest rates of the Company’s debt obligations that were outstanding at March 31, 2020 and December 31, 2019:


	At				At
	March 31, 2020				December 31, 2019
			Wtd. Avg.				Wtd. Avg.
			Effective				Effective
	Carrying		Interest		Carrying		Interest
(dollars in thousands)	Value (3)		Rate (3)		Value (3)		Rate (3)
Other Debt
Subordinated debt (1)
Due within one year		2,206	3.1			2,212	3.2
Due after one year		92,717	3.1			93,276	3.2
Revolving credit facility debt obligations
Due within one year		─	─			─	─
Due after one year		120,000	5.3			94,500	5.6
Notes payable and other debt (2)
Due within one year		4,430	14.3			6,828	14.7
Due after one year		4,300	5.0			1,500	5.0

Total other debt		223,653	4.5			198,316	4.8

Asset Related Debt
Notes Payable and Other Debt
Non-bond related debt
Due within one year	$	─	─	%	$	650	5.0	%
Due after one year		─	─			2,850	5.0

Total asset related debt		─	─			3,500	5.0

Total debt	$	223,653	4.5		$	201,816	4.8

⁽¹⁾

The subordinated debt balances include net cost basis adjustments of $7.3 million and $7.4 million at March 31, 2020 and December 31, 2019, respectively, that pertain to premiums and debt issuance costs.

⁽²⁾

Included in Other Debt – notes payable and other debt were unamortized debt issue costs of $0.1 million at December 31, 2019. The balance at March 31, 2020 was de minimis.

⁽³⁾

Carrying value amounts and weighted-average interest rates reported in this table include the effects of any discounts, premiums and other cost basis adjustments. An effective interest rate represents an internal rate of return of a debt instrument that makes the net present value of all cash flows, inclusive of cash flows that give rise to cost basis adjustments, equal zero and in the case of (i) fixed rate instruments, is measured as of an instrument’s issuance date and (ii) variable rate instruments, is measured as of each date that a reference interest rate resets.

Covenant Compliance and Debt Maturities

The following table provides information about scheduled principal payments associated with the Company’s debt agreements that were outstanding at March 31, 2020:


	Asset Related Debt
(in thousands)	and Other Debt
2020	$	5,733
2021		1,913
2022		121,879
2023		1,846
2024		1,813
Thereafter		83,197
Net premium and debt issue costs		7,272
Total debt	$	223,653

At March 31, 2020, the Company was in compliance with all covenants under its debt obligations.

Other Debt

Other debt of the Company finances non-interest-bearing assets and other business activities of the Company. The interest expense associated with this debt is classified as “Interest expense” under “Other expenses” on the Consolidated Statements of Operations.

Subordinated Debt

The table below provides information about the key terms of the subordinated debt that was issued by MMA Financial Holdings, Inc. (“MFH”), the Company’s wholly owned subsidiary, and that was outstanding at March 31, 2020:


(dollars in thousands)			Net Premium				Interim
			and Debt		Carrying		Principal
Issuer	UPB		Issuance Costs		Value		Payments (1)	Maturity Date	Coupon
MFH	$	25,869	$	2,229	$	28,098	Amortizing	March 30, 2035	three-month LIBOR plus 2.0%
MFH		23,523		2,034		25,557	Amortizing	April 30, 2035	three-month LIBOR plus 2.0%
MFH		13,559		1,084		14,643	Amortizing	July 30, 2035	three-month LIBOR plus 2.0%
MFH		24,654		1,971		26,625	Amortizing	July 30, 2035	three-month LIBOR plus 2.0%
Total	$	87,605	$	7,318	$	94,923

⁽¹⁾

The subordinated principal amortizes 2.0% per annum.

Revolving Credit Facility Debt Obligations

On September 19, 2019, MEH entered into a $125.0 million (the “Facility Amount”) revolving credit agreement with various lenders. During the first quarter of 2020, the maximum Facility Amount increased to $175.0 million and the committed amount of the revolving credit facility increased from $100.0 million to $120.0 million upon the joinder of an additional lender and an increase in commitment by one of the existing lenders.

Obligations associated with the revolving credit facility are guaranteed by the Company and are secured by specified assets of the Borrower and a pledge of all of the Company’s equity interest in the Borrower, which holds the equity interests in the Solar Ventures, through pledge and security documentation. Availability and amounts advanced under the revolving credit facility are subject to compliance with a borrowing base comprised of assets that comply with certain eligibility criteria, and includes late-stage development, construction and permanent loans to finance renewable energy projects and cash.

The revolving credit facility contains affirmative and negative covenants binding on the Borrower that are customary for credit facilities of this type. Additionally, the credit agreement includes collateral performance tests and the following financial covenants of the Company and its consolidated subsidiaries: minimum debt service coverage ratio, maximum debt to net worth, minimum consolidated net worth and minimum consolidated net income.

Borrowing under the revolving credit facility bears interest at the one-month London Interbank Offered Rate (“LIBOR”), adjusted for statutory reserve requirements (subject to a 1.5% floor), plus a fixed spread of 2.75% per annum. At March 31, 2020, the LIBOR base rate plus the fixed spread was 4.3%. At March 31, 2020, the weighted-average effective interest rate of the Company’s obligation was 5.3%. The Borrower has also agreed to pay certain customary fees and expenses and to provide certain indemnities. In certain circumstances where the interest rate is unable to be determined, including in the event LIBOR ceases to be published, the administrative agent to the credit agreement will select a new rate in its reasonable judgment, including any adjustment to the replacement rate to reflect a different credit spread. The maturity date of the credit agreement is September 19, 2022, subject to a 12-month extension solely to allow refinancing or orderly repayment of the facility.

At March 31, 2020, the UPB and carrying value of amounts borrowed from the revolving credit facility was $120.0 million. The Company recognized $1.3 million of related interest expense in the Consolidated Statements of Operations for the three months ended March 31, 2020.

Notes Payable and Other Debt

At March 31, 2020, the UPB and carrying value of notes payable and other debt that was used to finance the Company’s 11.85% ownership interest in SAWHF was $4.3 million and $4.2 million, respectively. This debt, which is denominated in South African rand, has a contractual maturity date of September 8, 2020, and requires the Company to pay its counterparty a rate equal to the Johannesburg Interbank Agreed Rate (“JIBAR”) plus a fixed spread of 5.15%. At March 31, 2020, the JIBAR base rate was 6.48%, while the weighted-average effective interest rate of the Company’s debt obligation that was used to finance its ownership in SAWHF was 14.7%.

At March 31, 2020, the UPB and carrying value of notes payable and other debt obligations to the Morrison Grove Management, LLC (“MGM”) principals was $4.5 million. This debt bears interest at 5.0%. The $3.0 million debt obligation amortizes over its contractual life and is due to mature on January 1, 2026. The $1.5 million debt obligation pays interest only until March 31, 2026 and then amortizes in three equal installments until its maturity date of January 1, 2027.

Asset Related Debt

Asset related debt is debt that finances interest-bearing assets of the Company. The interest expense associated with this debt is included within “Net interest income” on the Consolidated Statements of Operations.

Non-bond Related Debt

During the first quarter of 2020, this $3.5 million debt obligation to MGM was reclassified to Other Debt upon the full repayment of the Hunt Note.

Letters of Credit

The Company had no letters of credit outstanding at March 31, 2020 and December 31, 2019.