Mortgages and Other Loans Payable

9 Months Ended

Sep. 30, 2019

Mortgages and Other Loans Payable

The first mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt investments at September 30, 2019 and December 31, 2018, respectively, were as follows (dollars in thousands):



Property	Maturity Date	Interest Rate ⁽¹⁾			September 30, 2019			December 31, 2018
Fixed Rate Debt:
762 Madison Avenue	February 2022		5.00	%	771			771
100 Church Street	July 2022		4.68	%	210,382			213,208
420 Lexington Avenue	October 2024		3.99	%	300,000			300,000
400 East 58th Street ⁽²⁾	November 2026		3.00	%	39,306			39,931
Landmark Square	January 2027		4.90	%	100,000			100,000
485 Lexington Avenue	February 2027		4.25	%	450,000			450,000
1080 Amsterdam ⁽³⁾	February 2027		3.59	%	35,297			35,807
315 West 33rd Street	February 2027		4.17	%	250,000			250,000
Total fixed rate debt					$	1,385,756		$	1,389,717
Floating Rate Debt:
FHLB Facility	December 2019	L+	0.18	%	14,500			14,500
FHLB Facility	January 2020	L+	0.26	%	10,000			—
FHLB Facility	February 2020	L+	0.32	%	15,000			—
2017 Master Repurchase Agreement	June 2020	L+	2.22	%	190,107			300,000
133 Greene Street	August 2020	L+	2.00	%	15,523			15,523
106 Spring Street	January 2021	L+	2.50	%	38,025			—
609 Fifth Avenue	March 2021	L+	2.40	%	52,990			—
185 Broadway ⁽⁴⁾	November 2021	L+	2.85	%	115,886			111,869
712 Madison Avenue	December 2021	L+	2.50	%	28,000			28,000
460 West 34th Street⁽⁵⁾	May 2022	L+	2.23	%	310,236
Suburban Loan ⁽⁶⁾	July 2022	L+	2.79	%	228,660			—
719 Seventh Avenue	September 2023	L+	1.20	%	50,000			50,000
FHLB Facility ⁽⁷⁾					—			13,000
115 Spring Street ⁽⁸⁾					—			65,550
Total floating rate debt					$	1,068,927		$	598,442
Total mortgages and other loans payable					$	2,454,683		$	1,988,159
Deferred financing costs, net of amortization					(37,522		)	(26,919		)
Total mortgages and other loans payable, net					$	2,417,161		$	1,961,240


(1)	Interest rate as of September 30, 2019, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified.


(2)	The loan carries a fixed interest rate of 300 basis points for the first five years and is prepayable without penalty at the end of year five.


(3)	The loan is comprised of a $35.5 million mortgage loan and $0.9 million mezzanine loan with a fixed interest rate of 350 basis points and 700 basis points, respectively, for the first five years and is prepayable without penalty at the end of year five.


(4)	This loan is a $225.0 million construction facility, with reductions in interest cost based on meeting certain conditions, and has an initial three-year term with two one-year extension options. Advances under the loan are subject to incurred costs and funded equity requirements.


(5)	This loan is a $465.0 million construction facility, with reductions in interest cost based on meeting certain conditions, and has an initial three-year term with two one-year extension options. Advances under the loan are subject to incurred costs and funded equity requirements.


(6)	Collateralized by the properties located at 360 Hamilton Avenue, 100 Summit Lake Drive, 200 Summit Lake Drive and 500 Summit Lake Drive.


(7)	In August 2019, the loan was repaid.


(8)	In August 2019, the Company sold a 49% interest in 115 Spring Street to a private investor. The transaction resulted in the deconsolidation of our remaining 51% interest. See Note 6, "Investments in Unconsolidated Joint Ventures."

At September 30, 2019 and December 31, 2018, the gross book value of the properties and debt and preferred equity investments collateralizing the mortgages and other loans payable was approximately $3.7 billion and $2.6 billion, respectively.

Federal Home Loan Bank of New York Facility

The Company's wholly-owned subsidiary, Ticonderoga Insurance Company, or Ticonderoga, a Vermont licensed captive insurance company, is a member of the Federal Home Loan Bank of New York, or FHLBNY. As a member, Ticonderoga may borrow funds from the FHLBNY in the form of secured advances. As of September 30, 2019, we had $14.5 million, $10.0 million and $15.0 million in outstanding secured advances with a borrowing rate of 30-day LIBOR plus 18 basis points, 30-day LIBOR plus 26 basis points and 30-day LIBOR plus 32 basis points, respectively.

Master Repurchase Agreement

The Company entered into a Master Repurchase Agreement, or MRA, known as the 2017 MRA, which provides us with the ability to sell certain mortgage investments with a simultaneous agreement to repurchase the same at a certain date or on demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To monitor credit risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with potential margin calls is further mitigated by our ability to recollateralize the facility with additional assets from our portfolio of debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity through the 2017 credit facility, as defined below.

The 2017 MRA has a maximum facility capacity of $300.0 million. In April 2018, we increased the maximum facility capacity to $400.0 million. The facility bears interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate. In June 2018, we exercised a one year extension option and in June 2019, we exercised another one year extension option. In August 2019, we amended our agreement to include two additional one year extension options. At September 30, 2019, the facility had a carrying value of $189.6 million, net of deferred financing costs.

Corporate Indebtedness

2017 Credit Facility

In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was originally entered into by the Company in November 2012, or the 2012 credit facility. As of September 30, 2019, the 2017 credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024, respectively. The revolving credit facility has two six-month as-of-right extension options to March 31, 2023. We also have an option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions.

As of September 30, 2019, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5 basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans under Term Loan A, and (iii) 150 basis points to 245 basis points for loans under Term Loan B, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of the Company.

In May 2019, we entered into an agreement to reduce the interest rate spread under Term Loan B by 65 basis points to a spread over 30-day LIBOR ranging from 85 basis points to 165 basis points. This reduction will be effective in November 2019.

At September 30, 2019, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for Term Loan A, and 165 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long term indebtedness of the Company. As of September 30, 2019, the facility fee was 20 basis points.

As of September 30, 2019, we had $11.8 million of outstanding letters of credit, $335.0 million drawn under the revolving credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.2 billion under the 2017 credit facility. At September 30, 2019 and December 31, 2018, the revolving credit facility had a carrying value of $328.5 million and $492.2 million, respectively, net of deferred financing costs. At September 30, 2019 and December 31, 2018, the term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.

The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility.

The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).

Senior Unsecured Notes

The following table sets forth our senior unsecured notes and other related disclosures as of September 30, 2019 and December 31, 2018, respectively, by scheduled maturity date (amounts in thousands):



Issuance	September 30, 2019 Unpaid Principal Balance		September 30, 2019 Accreted Balance			December 31, 2018 Accreted Balance			Interest Rate ⁽¹⁾			Initial Term (in Years)	Maturity Date
March 16, 2010 ⁽²⁾	$	250,000	$	250,000		$	250,000			7.75	%	10	March 2020
August 7, 2018 ^{(3) (4)}	350,000		350,000			350,000			L+	0.98	%	3	August 2021
October 5, 2017 ⁽³⁾	500,000		499,669			499,591				3.25	%	5	October 2022
November 15, 2012 ⁽⁵⁾	300,000		303,404			304,168				4.50	%	10	December 2022
December 17, 2015 ⁽²⁾	100,000		100,000			100,000				4.27	%	10	December 2025
	$	1,500,000	$	1,503,073		$	1,503,759
Deferred financing costs, net			(6,706		)	(8,545		)
	$	1,500,000	$	1,496,367		$	1,495,214


(1)	Interest rate as of September 30, 2019, taking into account interest rate hedges in effect during the period. Floating rate notes are presented with the stated spread over 3-month LIBOR, unless otherwise specified.


(2)	Issued by the Company and the Operating Partnership as co-obligors.


(3)	Issued by the Operating Partnership with the Company as the guarantor.


(4)	Beginning on August 8, 2019 and at any time thereafter, the notes are subject to redemption at the Company's option, in whole but not in part, at a redemption price equal to 100% of the principal amount of the notes, plus unpaid accrued interest thereon to the redemption date.


(5)	In October 2017, the Company and the Operating Partnership as co-obligors issued an additional $100.0 million of 4.50% senior unsecured notes due December 2022. The notes were priced at 105.334% of par.

Restrictive Covenants

The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of September 30, 2019 and December 31, 2018, we were in compliance with all such covenants.

Junior Subordinated Deferrable Interest Debentures

In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense.

Principal Maturities

Combined aggregate principal maturities of mortgages and other loans payable, 2017 credit facility, trust preferred securities, senior unsecured notes and our share of joint venture debt as of September 30, 2019, including as-of-right extension options and put options, were as follows (in thousands):



	Scheduled Amortization		Mortgages and Other Loans Payable		Revolving Credit Facility		Unsecured Term Loans		Trust Preferred Securities		Senior Unsecured Notes		Total		Joint Venture Debt
Remaining 2019	$	2,307	$	14,500	$	—	$	—	$	—	$	—	$	16,807	$	10,700
2020	11,118		230,630		—		—		—		250,000		491,748		804,143
2021	11,638		234,901		—		—		—		350,000		596,539		704,174
2022	9,430		737,452		—		—		—		800,000		1,546,882		268,968
2023	7,301		50,000		335,000		1,300,000		—		—		1,692,301		311,452
Thereafter	9,290		1,136,116		—		200,000		100,000		100,000		1,545,406		1,831,026
	$	51,084	$	2,403,599	$	335,000	$	1,500,000	$	100,000	$	1,500,000	$	5,889,683	$	3,930,463

Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Interest expense before capitalized interest	$	63,607		$	64,078		$	185,163		$	180,550
Interest on financing leases	813			—			2,425			—
Interest capitalized	(15,700		)	(8,504		)	(38,228		)	(22,785		)
Interest income	(608		)	(406		)	(3,563		)	(1,070		)
Interest expense, net	$	48,112		$	55,168		$	145,797		$	156,695