Long-Term Debt

12 Months Ended

Dec. 31, 2020

Long-term debt consisted of the following (in thousands):


	December 31,
	2020		2019
6.125% Senior Notes	$	542,772	$	540,377
Credit Facility	137,613		48,917
Total	$	680,385	$	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 98.94% 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):


	December 31,
	2020		2019
Principal balance	$	550,000	$	550,000
Less: debt issue cost	3,688		4,972
Less: debt discount	3,540		4,651
Total	$	542,772	$	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 consolidated statements of operations, were as follows (in thousands):


	Year Ended December 31,
		2020		2019		2018
Interest expense		$	33,687	$	34,730	$	5,300
Debt issue cost amortization		1,284		1,282		198
Debt discount amortization		1,111		565		47
Total		$	36,082	$	36,577	$	5,545

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.

As of December 31, 2020, Newmark had $50.0 million remaining under its debt repurchase authorization (see Note 32 — “Subsequent Events” for additional information).

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%, plus an applicable margin. 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, 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, increasing the size of the Amended Credit Facility to $465.0 million (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 year ended December 31, 2020, Newmark drew $365.0 million on the Credit Facility and paid down $275.0 million.

Details of the Credit Facility are as follows (in thousands):


	December 31,
	2020		2019
Principal balance	$	140,000	$	50,000
Less: Debt issue cost	2,387		1,083
Total	$	137,613	$	48,917

As of December 31, 2020 and 2019, borrowings under the Credit Facility carried an interest rate of 1.90% and 3.76%, with a weighted-average interest rate of 2.37% and 3.76%, 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 Credit Facility, included in “Interest (expense) income, net” on the accompanying consolidated statements of operations, were as follows (in thousands):


	Year Ended December 31,
		2020		2019		2018
Interest expense		$	6,618	$	1,865	$	—
Debt issue cost amortization		1,012		565		47
Unused facility fee		354		627		71
Total		$	7,984	$	3,057	$	118

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).