XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Long-Term Debt
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
Long-term debt consisted of the following (in thousands):
 September 30, 2020December 31, 2019
6.125% Senior Notes
$542,166 $540,377 
Credit Facility337,338 48,917 
Total$879,504 $589,294 

6.125% Senior Notes
On November 6, 2018, Newmark closed its offering of $550.0 million aggregate principal amount of 6.125% Senior Notes due 2023 (the “6.125% Senior Notes”). The 6.125% Senior Notes were priced on November 1, 2018 at 98.937% to yield 6.375%. The 6.125% Senior Notes were offered and sold by Newmark in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended (“Securities Act”). The 6.125% Senior Notes were subsequently exchanged for notes with substantially similar terms that were registered under the Securities Act. The 6.125% Senior Notes bear an interest rate of 6.125% per annum, payable on each May 15 and November 15, beginning on May 15, 2019, and will mature on November 15, 2023.


The carrying amount of the 6.125% Senior Notes was determined as follows (in thousands):
 September 30, 2020December 31, 2019
Principal balance$550,000 $550,000 
Less: debt issue cost4,009 4,972 
Less: debt discount3,825 4,651 
Total$542,166 $540,377 
Newmark uses the effective interest rate method to amortize debt discounts and uses the straight-line method to amortize debt issue costs over the life of the notes. Interest expense, amortization of debt issue costs and amortization of the debt discount of the 6.125% Senior Notes, included in “Interest (expense) income, net” on the accompanying unaudited condensed consolidated statements of operations, were as follows (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Interest expense8,702 8,684 26,092 26,041 
Debt issue cost amortization321 321 963 961 
Debt discount amortization275 263 737 775 
Total$9,298 $9,268 $27,792 $27,777 

Debt Repurchase Program
On June 16, 2020, the Newmark Board of Directors and its Audit Committee authorized a debt repurchase program for the repurchase by Newmark of up to $50.0 million of Newmark’s 6.125% Senior Notes and any future debt securities issued by the Company (collectively, “Company debt securities”).

As of September 30, 2020, Newmark had $50.0 million remaining under its debt repurchase authorization.

Credit Facility
On November 28, 2018, Newmark entered into a credit agreement by and among Newmark, the several financial institutions from time to time party thereto, as Lenders, and Bank of America N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement provided for a $250.0 million three-year unsecured senior revolving credit facility (the “Credit Facility”). Borrowings under the Credit Facility bore an annual interest rate equal to, at Newmark’s option, either (a) LIBOR for specified periods, or upon the consent of all Lenders, such other period that is 12 months or less, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.5%, (ii) the prime rate as established by the administrative agent, and (iii) one-month LIBOR plus 1.0%. The applicable margin is 2.0% with respect to LIBOR borrowings and can range from 1.25% to 2.25% in (a) above and was 1.00% with respect to base rate borrowings and can range from 0.25% to 1.25% in (b) above, depending upon Newmark’s credit rating. The Credit Facility also provides for an unused facility fee.
On February 26, 2020, Newmark entered into an amendment to the Credit Agreement (the “Amended Credit Agreement”), increasing the size of the Credit Facility to $425.0 million (the “Amended Credit Facility”) and extending the maturity date to February 26, 2023. The annual interest rate on the Amended Credit Facility was reduced to LIBOR plus 1.75%, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch.

    On March 16, 2020, Newmark entered into a second amendment to the Credit Agreement (the “Second Amended Credit Agreement”), increasing the size of the Amended Credit Facility to $465.0 million and extending the maturity date to February 26, 2023 (the "Second Amended Credit Facility"). The annual interest rate on the Second Amended Credit Facility is LIBOR plus 1.75%, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch.

During the nine months ended September 30, 2020, Newmark drew $365.0 million on the Credit Facility and paid down $75.0. On October 14, 2020, Newmark paid down an additional $100.0 million of the Credit Facility.

Details of the Second Amended Credit Facility are as follows (in thousands):
 September 30, 2020December 31, 2019
Principal balance$340,000 $50,000 
Less: Debt issue cost2,662 1,083 
Total$337,338 $48,917 
As of September 30, 2020 and 2019, borrowings under the Credit Facility carried an interest rate of 1.91% and 4.41%, with a weighted-average interest rate of 2.53% and 4.41%, respectively. Newmark uses the straight-line method to amortize debt issue costs over the life of the notes. Interest expense and amortization of debt issue costs of the Second Amended Credit Facility, included in “Interest (expense) income, net” on the accompanying unaudited condensed consolidated statements of operations, were as follows (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Interest expense$1,805 $552 $5,504 $1,267 
Debt issue cost amortization275 141 737 424 
Unused facility fee63 153 203 481 
Total$2,143 $846 $6,444 $2,172 

On November 30, 2018, Newmark entered into an unsecured credit agreement (the “Cantor Credit Agreement”) with Cantor (see Note 27 — “Related Party Transactions” for a more detailed discussion).