Note 7—Mortgage Notes, Lines of Credit and Bonds Payable

As of December 31, 2019 and 2018, the Company had the following indebtedness outstanding:


			Annual Interest						Book Value of
			Rate as of	Principal Outstanding as of					Collateral
($ in thousands)			December 31,	December 31,					as of December 31,
Loan	Payment Terms	Interest Rate Terms	2019	2019		2018		Maturity	2019		2018
Farmer Mac Bond #6	Semi-annual interest only	3.69%	3.69%		13,827		14,915	April 2025	$	21,441	$	22,076
Farmer Mac Bond #7	Semi-annual interest only	3.68%	3.68%		11,160		11,160	April 2025		18,570		18,561
Farmer Mac Bond #8A	Semi-annual interest only	3.20%	3.20%		41,700		41,700	June 2020		74,310		80,989
Farmer Mac Bond #9	Semi-annual interest only	3.35%	3.35%		6,600		6,600	July 2020		7,940		7,828
MetLife Term Loan #1 (1)	Semi-annual interest only	3.48% adjusted every three years	3.48%		87,942		89,913	March 2026		195,615		199,584
MetLife Term Loan #2	Semi-annual interest only	4.27% adjusted every three years	4.27%		16,000		16,000	March 2026		32,199		32,189
MetLife Term Loan #3	Semi-annual interest only	4.27% adjusted every three years	4.27%		21,000		21,000	March 2026		27,817		27,525
MetLife Term Loan #4 (1)	Semi-annual interest only	3.48% adjusted every three years	3.48%		15,685		15,685	June 2026		31,266		31,124
MetLife Term Loan #5	Semi-annual interest only	3.26% adjusted every three years	3.26%		8,379		8,379	January 2027		14,281		13,964
MetLife Term Loan #6	Semi-annual interest only	3.21% adjusted every three years	3.21%		27,158		27,158	February 2027		58,087		58,058
MetLife Term Loan #7	Semi-annual interest only	3.45% adjusted every three years	3.45%		17,153		21,253	June 2027		39,126		48,963
MetLife Term Loan #8	Semi-annual interest only	4.12% fixed until 2027	4.12%		44,000		44,000	December 2042		110,042		110,042
MetLife Term Loan #9	Semi-annual interest only	4.19% adjusted every three years	4.19%		21,000		21,000	May 2028		41,223		40,981
Farm Credit of Central Florida	(2)	LIBOR + 2.6875% adjusted monthly	4.44%		4,890		5,060	September 2023		14,745		13,263
Prudential	(3)	3.20%	3.20%		-		5,144	July 2019		—		10,583
Rabobank	Semi-annual interest only	LIBOR + 1.70% adjustable every three years	3.39%		64,358		64,359	March 2028		135,432		134,901
Rutledge Note Payable #1	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	3.44%		17,000		17,000	January 2022		29,820		29,576
Rutledge Note Payable #2	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	3.44%		25,000		25,000	January 2022		39,468		39,749
Rutledge Note Payable #3	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	3.44%		25,000		25,000	January 2022		45,764		58,006
Rutledge Note Payable #4	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	3.44%		15,000		15,000	January 2022		29,170		29,170
Rutledge Note Payable #5	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	3.44%		30,000		30,000	January 2022		85,287		85,707
Total outstanding principal					512,852		525,326		$	1,051,603	$	1,092,841
Debt issuance costs					(1,449)		(1,685)
Unamortized premium					-		-
Total mortgage notes and bonds payable, net				$	511,403	$	523,641

(1)

During the year ended December 31, 2017 the Company converted the interest rate on Metlife Term Loans 1 and 4 from variable to fixed rates for a term of three years. Once the term expires the new rate will be determined based on the loan agreements.

(2)

Loan is an amortizing loan with quarterly interest payments that commenced on January 1, 2017 and quarterly principal payments that commence on October 1, 2018, with all remaining principal and outstanding interest due at maturity.

(3)

Loan was repaid in full on June 28, 2019 and was an amortizing loan with semi-annual principal and interest payments that commence on July 1, 2017, with all remaining principal and outstanding interest due at maturity.

Farmer Mac Bonds

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $73.3 million and $74.4 million outstanding, respectively, under the Farmer Mac bonds. The Farmer Mac bonds are subject to the Company’s ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including: a maximum leverage ratio of not more than 60%; a minimum fixed charge coverage ratio of 1.50 to 1.00; and a minimum tangible net worth requirement. The Company was in compliance with all applicable covenants at December 31, 2019.

MetLife Term Loans

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $258.3 million and $264.4 million outstanding, respectively, under the MetLife loans. Each of the MetLife loan agreements contains a number of customary affirmative and negative covenants, including the requirement to maintain a loan to value ratio of no greater than 60%. The MetLife Guaranties also contain a number of customary affirmative and negative covenants. The Company was in compliance with all covenants under the MetLife loans as of December 31, 2019.

Each of the MetLife loan agreements includes certain customary events of default, including a cross-default provision related to other outstanding indebtedness of the borrowers, the Company and the Operating Partnership, the occurrence of which, after any applicable cure period, would permit MetLife, among other things, to accelerate payment of all amounts outstanding under the MetLife loans and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the Company’s properties that collateralize the MetLife loans.

Farm Credit of Central Florida Mortgage Note

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $4.9 million and $5.1 million outstanding, respectively, and approximately $5.1 million had been drawn down under the Farm Credit mortgage note facility. Proceeds from the Farm Credit mortgage note were used for the development of additional properties.

The Farm Credit mortgage note facility contains a number of customary affirmative and negative covenants, as well as a covenant requiring the Company to maintain a debt service coverage ratio of 1.25 to 1.00 beginning on December 31, 2019. The Company was in compliance with all covenants under the Farm Credit mortgage note as of December 31, 2019.

Prudential Note

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $0.0 million and $5.1 million outstanding, respectively, under the Prudential facility. On June 28, 2019 the Company fully repaid all outstanding amounts under this note.

Rutledge Credit Facility

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $112.0 million and $112.0 million outstanding, respectively, under the Rutledge facility. As of December 31, 2019, $0 remains available under this facility and the Company was in compliance with all covenants under the Rutledge loan agreements.

Rabobank Mortgage Note

As of December 31, 2019 and December 31, 2018, the Company and the Operating Partnership had $64.4 million and $64.4 million outstanding, respectively, under the Rabobank mortgage note. The Company was in compliance with all covenants under the Rabobank mortgage note as of December 31, 2019.

LIBOR

LIBOR is expected to be discontinued after 2021. As of December 31, 2019, the Company had $181.3 million of variable- rate debt outstanding with interest rates tied to LIBOR and maturity dates beyond 2021. There can be no assurances as to what the alternative base rate will be in the event that LIBOR is discontinued, and the Company can provide no assurances whether that base rate will be more or less favorable than LIBOR. The Company intends to monitor the developments with respect to the phasing out of LIBOR after 2021 and work with its lenders to ensure that any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of LIBOR discontinuation.

Aggregate Maturities

As of December 31, 2019, aggregate maturities of long-term debt for the succeeding years are as follows:


($ in thousands)
Year Ending December 31,	Future Maturities
2020	$	48,574
2021		274
2022		112,274
2023		4,067
2024		2,100
Thereafter		345,563
	$	512,852

Fair Value

The fair value of the mortgage notes payable is valued using Level 3 inputs under the hierarchy established by GAAP and is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimates of market interest rates on long-term debt with comparable terms whenever the interest rates on the mortgage notes payable are deemed not to be at market rates. As of December 31, 2019 and 2018, the fair value of the mortgage notes payable was $518.9 million and $518.6 million, respectively.