NOTES PAYABLE AND LONG-TERM DEBT

At December 31, 2013 and 2012, notes payable and long-term debt consisted of the following (in millions):



	2013			2012
Revolving Credit loans, (2.53% for 2013 and 2.07% for 2012)	$	112.1		$	5.0
Term Loans:
6.90%, payable through 2020	85.0			90.0
5.55%, payable through 2026	50.0			50.0
5.53%, payable through 2024	37.5			37.5
5.56%, payable through 2026	25.0			25.0
3.90%, payable through 2024	75.0			—
4.35%, payable through 2026	25.0			—
6.20%, payable through 2013, secured by Deere Valley Center	—			10.1
6.38%, payable through 2017, secured by Midstate 99 Distribution Ctr.	8.3			8.3
5.50%, payable through 2014, secured by Little Cottonwood Center	6.1			6.3
5.88%, payable through 2014, secured by Midstate 99 Distribution Ctr.	3.2			3.3
5.39%, payable through 2015, secured by Waianae Mall	19.9			—
5.89%, payable through 2016, secured by Pearl Highlands Center	61.8			—
2.08%, payable through 2021, secured by Kailua Town Center III (a)	11.3			—
2.84%, payable through 2016, secured by Kukui'ula Village (b)	44.0			—
2.80%, payable through 2016, secured by Kahala Estate Properties (c)	42.0			—
3.05%, payable through 2014, secured by Maui Mall (d)	60.0			—
3.31%, payable through 2018	8.0			—
2.00%, payable through 2018	2.9			—
2.65%, payable through 2016	1.8			—
5.00%, payable through 2014	0.3			—
5.19%, payable through 2019	11.9			—
1.17%, payable through 2021, secured by asphalt plant (e)	8.9			—
1.85%, payable through 2017	10.7			—
Total debt	710.7			235.5
Less debt (premium) discount	(1.8		)	—
Total debt (contractual)	708.9			235.5
Less current portion	(105.2		)	(15.5		)
Add debt premium (discount)	1.8			—
Long-term debt	$	605.5		$	220.0


(a)	Loan has a stated interest rate of LIBOR plus 1.5%, but is swapped through maturity to a 5.95% fixed rate.


(b)	Loan has a stated interest rate of LIBOR plus 2.66%.


(c)	Loan has a stated interest rate of LIBOR plus 2.63%.


(d)	Loan has a stated interest rate of LIBOR plus 3.00%. The loan was used as temporary financing for the acquisition of the Kailua Portfolio in December 2013. The loan was paid off with reverse 1031 proceeds from Maui Mall on January 6, 2014.


(e)	Loan has a stated interest rate of LIBOR plus 1.0%, but is swapped through maturity to a 5.98% fixed rate.

Long-term Debt Maturities: At December 31, 2013, debt maturities during the next five years and thereafter, excluding amortization of debt discount or premium, are $105.2 million in 2014 (which includes a $60 million term loan paid off on January 6, 2014 with reverse 1031 proceeds from the sale of Maui Mall), $45.1 million in 2015, $166.7 million in 2016 (which includes $94.0 million of secured mortgage debt), $133.9 million for 2017 (which includes $95.0 million of revolving credit loans that mature in 2017), $31.9 million in 2018, and $226.1 million thereafter.

Revolving Credit Facilities: The Company has a revolving senior credit facility that provides for an aggregate $350 million, 5-year unsecured commitment ("A&B Senior Credit Facility"), with an uncommitted $100 million increase option. The facility expires in June 2017. The A&B Senior Credit Facility also provides for a $100 million sub-limit for the issuance of standby and commercial letters of credit and an $80 million sub-limit for swing line loans. Amounts drawn under the facilities bear interest at London Interbank Offered Rate (“LIBOR”) plus a margin based on a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) pricing grid. The agreement contains certain restrictive covenants, the most significant of which requires the maintenance of minimum shareholders’ equity levels, minimum EBITDA to fixed charges ratio, maximum debt to total assets ratio, minimum unencumbered income-producing asset value to unencumbered debt ratio, and limitations on priority debt. At December 31, 2013, $95.0 million was outstanding, $11.4 million in letters of credit had been issued against the facilities, and $243.6 million remained available for borrowing.

The Company has a replenishing three-year unsecured note purchase and private shelf agreement with Prudential Investment Management, Inc. and its affiliates (collectively, “Prudential”) under which the Company may issue notes in an aggregate amount up to $300 million, less the sum of all principal amounts then outstanding on any notes issued by the Company or any of its subsidiaries to Prudential and the amounts of any notes that are committed under the note purchase agreement. The Prudential agreement contains certain restrictive covenants that are substantially the same as the covenants contained in the revolving senior credit facilities. The ability to draw additional amounts under the Prudential facility expires in June 2015 and borrowings under the shelf facility bear interest at rates that are determined at the time of the borrowing. At December 31, 2013, approximately $2.5 million was available under the facility.

At December 31, 2013, the Company had, at two subsidiaries, a $40.0 million line of credit that matures in August 2014 and a $4.0 million line of credit that matures in May 2014. Approximately $17.1 million was outstanding on the $40.0 million line of credit and there were no borrowings outstanding under the $4.0 million line of credit. The lines are collateralized by the respective subsidiaries' accounts receivable, inventory, and equipment. The Company and the noncontrolling interest holders are guarantors, on a several basis, for its pro rata share (based on membership interests) of borrowings under the line of credit.

The unused borrowing capacity under all revolving credit and term facilities as of December 31, 2013 totaled $246.1 million.

Real Estate Secured Term Debt: On December 18, 2013, the Company entered into a short-term facility ("Bridge Loan"), by and among A&B LLC, Bank of America, N.A., and other lenders party thereto, to finance a portion of the Company's $372.7 million purchase of the Kailua Portfolio. On December 20, 2013, the Company consummated the acquisition and borrowed $60 million under the Bridge Loan, which bears interest at LIBOR plus 3 percent. The Bridge Loan was paid off on January 6, 2014 with reverse 1031 proceeds from the disposition of Maui Mall. Additionally, in connection with the acquisition of the Kailua Portfolio, the Company assumed a $12.0 million mortgage note, which matures in September 2021, and an interest rate swap that effectively converts the floating rate debt to a fixed rate of 5.95 percent.

On December 16, 2013, Estates of Kahala LLC, a wholly owned subsidiary of the Company, entered into a non-recourse loan agreement (the "Loan Agreement") and promissory note ("Note") with First Hawaiian Bank ("Lender"). The $42.0 million loan is secured by 15 residential lots on Kahala Avenue on Oahu, three parcels in Windward Oahu, and an agricultural parcel on Maui. The Loan Agreement and Note require principal payments equal to 70 percent of the net sales proceeds from the sale of any of the secured properties. To the extent cumulative principal payments are less than $18 million after 18 months, the Company is required to make an additional principal payment, such that the remaining principal balance of the loan is less than or equal to $24 million. The loan bears interest at LIBOR plus 2.625 percent, matures on December 16, 2016, is prepayable without penalty, and provides for a one-year extension option, provided certain conditions are met. The loan also requires that the Company maintain a loan to value ratio below 65 percent for the properties secured.

On September 24, 2013, KDC LLC ("KDC"), a wholly owned subsidiary of A&B and a 50 percent member of Kukui'ula Village LLC ("Village"), entered into an Amended and Restated Limited Liability Company Agreement of Kukui'ula Village ("Agreement") with DMB Kukui'ula Village LLC ("DMB"), a Delaware limited liability company, as a member, and KKV Management LLC, a Hawaii limited liability company, as the manager and a member. Village owns and operates The Shops at Kukui'ula, a commercial retail center on the South shore of Kauai. Under the Agreement KDC assumed control of Village. Accordingly, A&B consolidated Village's assets and liabilities at fair value, which includes secured loans totaling approximately $51.2 million. The first loan, totaling $41.8 million (the "Real Estate Loan"), is secured by The Shops at Kukui'ula and 45 acres owned by Kukui'ula Development Company (Hawaii), LLC ("Kukui'ula"), in which KDC is a member. The second loan, totaling $9.4 million (the "Term Loan") is secured by a letter of credit. The Real Estate Loan and Term Loan were scheduled to mature on September 28, 2013. On September 25, 2013, Village entered into an agreement to extend the maturities of the loans to November 5, 2013, in order to finalize refinancing negotiations with the lender. In connection with the loan extensions, Village made a $5 million principal payment on the Real Estate Loan. On November 5, 2013, the Company refinanced the remaining $44.0 million of secured loans related to The Shops at Kukui'ula with new three-year term loans. The first loan, totaling $34.6 million, is secured by The Shops at Kukui'ula, 45 acres owned by Kukui'ula, in which KDC is a member, and an A&B guaranty. The loan bears interest at LIBOR plus 2.85 percent and requires principal amortization of $0.9 million per quarter. The second loan, totaling $9.4 million, is interest only, secured by a letter of credit, and bears interest at LIBOR plus 2.0 percent. The first loan contains guarantor covenants that mirror the covenants in A&B's $350 million revolving credit agreement.

On September 17, 2013, A & B Properties, Inc., a wholly owned subsidiary of the Company, closed the purchase of Pearl Highlands Center, a 415,400 square-foot, fee simple retail center in Pearl City, Oahu (the “Property”), for $82.2 million in cash and the assumption of a $59.3 million mortgage loan (the “Pearl Loan”), pursuant to the terms of the Real Estate Purchase and Sale Agreement, dated April 9, 2013, between PHSC Holdings, LLC and A&B Properties. The Pearl Loan, which is currently held by The Northwestern Mutual Life Insurance Company (the “Lender”), is secured by a Mortgage and Security Agreement, bears interest at 5.9 percent, and requires monthly payments of principal and interest totaling $0.4 million. A final balloon payment of $56.2 million is due on September 15, 2016.

On January 22, 2013, A&B completed the purchase of Waianae Mall, a 170,300 square-foot, 10-building retail center in Leeward Oahu, for $10.1 million in cash and the assumption of a $19.7 million loan (the “Loan”). The Promissory Note for the Loan is secured by a Mortgage, Assignment of Leases and Rents and Security Agreement, bears interest at 5.39 percent, and requires monthly payments of principal and interest totaling $0.1 million. A final balloon payment of $18.5 million is due on October 5, 2015. In connection with the loan assumption, the Company has also provided a limited guaranty for the payment of all obligations under the Loan. The guaranty is limited to 10 percent of the outstanding principal balance of the Loan upon the occurrence of an event of default, plus any cost incurred by the lender.

The approximate book values of assets used in the Real Estate segments pledged as collateral under the foregoing credit agreements at December 31, 2013 was $330.6 million. The approximate book values of assets used in the Natural Materials and Construction segment pledged as collateral under the foregoing credit agreements at December 31, 2013 was $41.2 million. There were no assets used in the Agribusiness segment that were pledged as collateral.