9. Long-Term Debt

Long-term debt includes:

	March 2, 2013			December 1, 2012
Nonrecourse mortgages:
6.30%, due May 1, 2014	$	227		$	289
5.73%, due August 1, 2015	18,887			19,018
8.13%, due April 1, 2016	3,833			3,943
7.0%, due October 2, 2017	5,939			6,016
Variable rate mortgage, due October 2, 2017*	6,672			6,726
Variable rate mortgage, due February 1, 2019*	11,316			11,396
Variable rate mortgage, due August 1, 2019*	7,980			8,034
5.25%, due January 27, 2020	4,033			4,067
Total nonrecourse mortgages	58,887			59,489
Revolving line of credit	—			—
Capital leases	112			72
Total	58,999			59,561
Less: current portion	(1,756		)	(1,869		)
Total long-term debt	$	57,243		$	57,692

* Griffin entered into interest rate swap agreements effectively to fix the interest rates on these loans (see below).

On June 15, 2012, Griffin and two of its wholly-owned subsidiaries entered into the Third Modification Agreement (the “Modification Agreement”) to the mortgage loan originally due January 1, 2013 with Webster Bank (the “Webster Mortgage”). The Modification Agreement extended the maturity of the Webster Mortgage to October 2, 2017. In accordance with the Modification Agreement, the interest rate under the Webster Mortgage, which was fixed at 6.08% through September 30, 2012, changed, effective October 1, 2012, to a floating rate of the one month LIBOR plus 2.75%. In anticipation of entering into the Modification Agreement, on June 7, 2012, Griffin entered into an interest rate swap agreement with Webster Bank to effectively fix the interest rate on the Webster Mortgage at 3.86% from October 1, 2012 through the maturity of the Webster Mortgage. Pursuant to the Modification Agreement, effective on October 1, 2012, principal payments on the Webster Mortgage were based on a twenty-five year amortization schedule. The Webster Mortgage is collateralized by Griffin Land’s two multi-story office buildings in Windsor, Connecticut. The Modification Agreement did not alter the collateral for the Webster Mortgage.

As of March 2, 2013, Griffin was a party to three interest rate swap agreements related to nonrecourse mortgages on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 4). No ineffectiveness on the cash flow hedges was recognized as of March 2, 2013 and none is anticipated over the term of the agreements. Amounts in other comprehensive income (loss) will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. The interest rate swap agreements do not contain any credit risk related contingent features. In the 2013 first quarter, Griffin recognized a gain (included in other comprehensive income) before taxes of $131 on its interest rate swap agreements. In the 2012 first quarter, Griffin recognized a loss (included in other comprehensive income) before taxes of $406 on its interest rate swap agreements.

As of March 2, 2013, $709 is expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of March 2, 2013, the liability for Griffin’s interest rate swap agreements was $2,885 and is included in other noncurrent liabilities on Griffin’s consolidated balance sheet.

On April 1, 2013 Griffin entered into a commitment letter with Webster Bank for a new $12.5 million revolving credit line (the “Webster Credit Line”). The Webster Credit Line would be for two years with an option for Griffin to extend the credit line for a third year. The Webster Credit Line would replace Griffin’s current $12.5 million credit line with Doral Bank (the “Doral Credit Line”) that expires on May 1, 2013. Interest on the outstanding borrowings under the Webster Credit Line would be at the one month LIBOR rate plus 2.75%. Interest on outstanding borrowings under the Doral Credit Line is the higher of the prime rate plus 1.5% or 5.875%. The Webster Credit Line would be collateralized by Griffin Land’s properties in Griffin Center South, aggregating approximately 235,000 square feet and an approximately 48,000 square foot single-story office building in Griffin Center. These are the same properties that collateralize the Doral Credit Line. There were no borrowings under the Doral Credit Line in fiscal 2012 or in the 2013 first quarter. There is no guarantee that a revolving credit agreement with Webster Bank will be completed under the terms described above, or at all.

On April 1, 2013, Griffin Land entered into a modification agreement for its 5.25% nonrecourse mortgage loan with First Niagara Bank due January 27, 2020. The modification agreement changes the loan’s interest rate from a fixed rate of 5.25% to a variable rate of the one month LIBOR rate plus 2.5%. The loan modification did not change the loan’s collateral or maturity date. Griffin Land paid approximately $100 for the loan modification, which included the fee paid to First Niagara bank and transaction costs. Concurrent with the loan modification, Griffin Land entered into an interest rate swap agreement with First Niagara Bank effectively to fix the interest rate on its nonrecourse mortgage loan with First Niagara Bank at 3.91% for the duration of the loan.