Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

Note 8 - Debt

On February 19, 2021, we entered into a credit agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for the lenders, providing for a $135.0 million revolving credit facility maturing on February 19, 2024. Advances under the revolving credit facility bear interest at prime rate plus 2.75% and the facility has a commitment fee of 1.0% of unfunded commitment per annum. We incurred fees of approximately $4.5 million in relation to the revolving credit facility, which were capitalized as deferred financing costs on the consolidated balance sheets and are being amortized over the three-year term. As of December 31, 2022, the revolving credit facility has no principal outstanding.

Our obligations under the revolving credit facility are secured by substantially all of the Company’s assets. The revolving credit facility contains covenants customary for financings of this type, including limitations on the incurrence of indebtedness, liens, asset dispositions, acquisitions, mergers and consolidations, certain dividends, distributions, stock repurchases and other payments, advances and investments, payments to affiliates, optional prepayments and other modifications of certain other indebtedness, and amendments, terminations and waivers of certain material agreements, as well as compliance with leverage and coverage ratios and maintenance of minimum tangible net worth. Among other things, the credit agreement provides that we may not pay cash dividends that would result in non-compliance with the financial covenants under the credit agreement or during an event of default under the credit agreement, except in the case of defaults other than payment defaults, for dividends in amounts necessary to maintain our REIT status. The revolving credit facility contains events of default customary for financings of this type, including failure to pay principal, interest and other amounts, materially incorrect representations or warranties, failure to observe covenants and other terms of the revolving credit facility, cross-defaults to other indebtedness, bankruptcy, insolvency, material judgments, certain ERISA violations, changes in control and failure to maintain REIT status, in some cases subject to customary grace periods.

On November 4, 2022, the credit agreement governing the revolving credit facility was amended to allow for repurchases of shares of the Company’s common stock, subject to certain limitations.

On November 12, 2021, we completed a private offering of $100.0 million of senior unsecured notes. Interest on the notes accrues at the fixed rate of 5.0% per annum, which is payable semi-annually on May 15 and November 15. The notes may be prepaid prior to their maturity date, subject to the payment of applicable premiums. The note purchase agreement governing the notes contains financial covenants that require compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as other affirmative and negative covenants that may limit, among other things, our ability to incur liens and enter into mergers or transfer all or substantially all of our assets. The note purchase agreement also includes customary representations and warranties and customary events of default. The amounts outstanding under the notes will be due on November 15, 2026. We incurred fees of approximately $2.9 million in relation to the issuance of the notes, which are amortized to interest expense over the remaining life of the respective loan term.

The following table presents the carrying values of our senior unsecured notes as of the periods indicated:

(dollars in thousands)	December 31, 2022			December 31, 2021
Principal	$	100,000		$	100,000
Debt issuance costs		(2,861	)		(2,855	)
Amortization of debt issuance costs		650			78
Total notes, net	$	97,789		$	97,223

The following table summarizes the components of interest expense related to our senior unsecured notes and revolving credit facility for the periods indicated:

	Year Ended
	December 31, 2022						December 31, 2021
(dollars in thousands)	Amortization of Deferred Debt Issuance Costs		Interest on Borrowings		Undrawn Fees		Amortization of Deferred Debt Issuance Costs		Interest on Borrowings		Undrawn Fees
5.0% senior unsecured notes	$	572	$	4,986	$	—	$	78	$	694	$	—
Revolving credit facility		1,510		151		1,419		1,255		107		1,186
Total	$	2,082	$	5,137	$	1,419	$	1,333	$	801	$	1,186