9. Debt

Notes Payable and Other Borrowings

BFC Financial

During July 2015, BFC entered into a Loan and Security Agreement and related agreements, including a Pledge Agreement (as amended in March 2016), with Stifel Bank & Trust, which allows for borrowings by the Company of up to $10.0 million on a revolving basis. Amounts borrowed under the facility will accrue interest at the lender’s prime rate plus 5.0% or one-month LIBOR plus 7.5%, at the option of the Company upon a drawdown of the facility. Payments of interest for prime rate advances are payable quarterly in arrears and for LIBOR advances are payable at the end of each one-month LIBOR interest period. Additional fees include an annual 0.5% fee on any unused portion of the facility. Borrowings under the facility will be secured by shares of Class A Common Stock of BBX Capital held by BFC in an amount such that the principal balance outstanding under the facility will not exceed 40% of the fair market value of the pledged BBX Capital shares based on the closing price of BBX Capital’s Class A Common Stock on the New York Stock Exchange. As of June 30, 2016, BFC had not drawn down any borrowings under the Loan and Security Agreement.

Bluegreen and BBX Capital

Financial data related to lines-of-credit and notes payable facilities of Bluegreen (other than receivable-backed notes payable facilities) and of BBX Capital was as follows as of June 30, 2016 and December 31, 2015 (dollars in thousands):



		June 30, 2016						December 31, 2015
						Carrying						Carrying
						Amount of						Amount of
		Debt		Interest		Pledged		Debt		Interest		Pledged
		Balance		Rate		Assets		Balance		Rate		Assets
Bluegreen:
2013 Notes Payable	$	55,500		8.05%		28,876		58,500		8.05%		30,411
Pacific Western Term Loan		2,376		5.70%		9,223		3,791		5.68%		10,868
Fifth Third Bank Note		4,449		3.50%		9,246		4,572		3.50%		9,336
NBA Line of Credit		5,335		5.50%		21,137		9,721		5.50%		24,246
Fifth Third Syndicated Line of Credit		25,000		3.21%		46,534		25,000		3.11%		54,312
Unamortized debt issuance costs		(1,854)		-		-		(1,975)		-		-
Total Bluegreen	$	90,806	$		$	115,016	$	99,609	$		$	129,173

BBX Capital:
Wells Fargo Capital Finance	$	8,598		(1)		(2)	$	8,071	$	(1)		(2)
Anastasia Note		5,376		5.00%		(2)		5,330		5.00%		(2)
Iberia Line of Credit		5,000		3.22%		(2)		4,997		3.18%		(2)
Centennial Bank - Hoffman's		1,596		5.25%	$	2,069		1,613		5.25%	$	2,094
Centennial Bank - Kencraft		995		2.35%		995		995		2.35%		995
Other		412		5.83%		-		415		5.82%		-
Unamortized debt issuance costs		(30)						(36)
Total BBX Capital	$	21,947					$	21,385

Total Notes Payable	$	112,753					$	120,994

(1)

The term loan and revolving advance facility bear interest at the Bank Prime Interest Rate or the daily three month LIBOR interest rate plus a margin specified in the credit agreement ranging from 0.5% to 3.25% per annum.

(2)

The collateral is a blanket lien on the assets of the applicable BBX Capital subsidiary.

See Note 13 to the Company’s financial statements included in the 2015 Annual Report for additional information regarding each of the above listed lines of credit and notes payable.

Bluegreen

There were no new debt issuances or significant changes related to Bluegreen’s non-receivable-backed notes payable or lines of credit during the six months ended June 30, 2016.

BBX Capital

There were no new debt issuances or significant changes related to BBX Capital’s lines of credit or notes payable during the six months ended June 30, 2016. However, in February 2016, BBX Capital executed Addendum No. 1 to the Iberiabank Loan and Security Agreement. The addendum replaced the debt service coverage financial covenant in this $5.0 million line of credit with a working capital to debt ratio financial covenant.

As of June 30, 2016, BBX Capital was in compliance with all financial debt covenants under its debt instruments.

Receivable-Backed Notes Payable

Financial data related to Bluegreen’s receivable-backed notes payable facilities was as follows as of June 30, 2016 and December 31, 2015 (dollars in thousands):



		June 30, 2016					December 31, 2015
					Principal					Principal
					Balance of					Balance of
					Pledged/					Pledged/
		Debt	Interest		Secured		Debt	Interest		Secured
		Balance	Rate		Receivables		Balance	Rate		Receivables
Recourse receivable-backed
notes payable:
Liberty Bank Facility	$	25,364	4.00%	$	31,806	$	46,547	4.00%	$	56,815
NBA Receivables Facility		19,949	4.00 - 4.50%		24,281		24,860	4.00 - 4.50%		29,947
Pacific Western Facility		16,332	4.97%		22,625		18,481	4.93%		23,596
Total	$	61,645		$	78,712	$	89,888		$	110,358

Non-recourse receivable-backed
notes payable:
BB&T/DZ Purchase Facility	$	9,086	3.37%	$	13,053	$	38,228	3.33%	$	50,224
Quorum Purchase Facility		29,139	4.75-6.90%		32,885		28,500	4.75-6.90%		32,303
2007 Term Securitization		-	-		-		17,642	7.32%		18,720
2008 Term Securitization		-	-		-		7,227	7.88%		7,726
2010 Term Securitization		18,646	5.54%		21,429		24,074	5.54%		28,159
2012 Term Securitization		38,378	2.94%		41,853		44,603	2.94%		49,091
2013 Term Securitization		55,079	3.20%		57,943		62,670	3.20%		66,020
2015 Term Securitization		84,897	3.02%		88,751		95,985	3.02%		100,142
2016 Term Securitization		123,243	3.35%		132,273		-	-		-
Unamortized debt issuance costs		(6,017)	-		-		(4,905)	-		-
Total	$	352,451		$	388,187	$	314,024		$	352,385
Total receivable-backed debt	$	414,096		$	466,899	$	403,912		$	462,743

New debt issuances and significant changes related to Bluegreen’s receivable-backed notes payable facilities during the six months ended June 30, 2016 were as follows:

Liberty Bank Facility. In March 2016, Bluegreen repaid $24.2 million, including accrued interest, under the facility in connection with the 2016 Term Securitization described below.

BB&T/DZ Purchase Facility. All amounts outstanding under the facility were repaid in March 2016 in connection with the 2016 Term Securitization described below.

2007 Term Securitization. In March 2016, Bluegreen repaid in full the notes payable issued as part of the 2007 Term Securitization with the issuance of the 2016 Term Securitization described below. Accordingly, Bluegreen wrote off the related unamortized debt issuance costs of $0.3 million during the first quarter of 2016.

2008 Term Securitization. In April 2016, Bluegreen repaid in full the notes payable issued as part of the 2008 Term Securitization with the issuance of the 2016 Term Securitization described below. Accordingly, Bluegreen wrote off the related unamortized debt issuance costs of $0.2 million during the second quarter of 2016.

2016 Term Securitization. On March 17, 2016, Bluegreen completed a private offering and sale of $130.5 million of investment grade, timeshare receivable-backed notes (the “2016 Term Securitization”). The 2016 Term Securitization consisted of the issuance of two tranches of timeshare receivable-backed notes (the “Notes”): $95.7 million of Class A and $34.8 million of Class B notes with note interest rates of 3.17% and 3.86%, respectively, which blended to an overall weighted average note interest rate of 3.35%. The gross advance rate for this transaction was 90%. The Notes mature in July 2031.

The amount of the timeshare receivables sold to BXG Receivable Note Trust 2016 (the “2016 Trust”) was $145.0 million, $122.3 million of which was sold to the 2016 Trust at closing, $8.7 million of which was subsequently sold to the 2016 Trust during the three months ended March 31, 2016, and $14.0 million of which was sold to the 2016 Trust during the three months ended June 30, 2016. The gross proceeds of such sales to the 2016 Trust were $130.5 million. A portion of the proceeds were used to: repay the BB&T/DZ Purchase Facility a total of $49.0 million, representing all amounts outstanding under the facility (including accrued interest); repay $24.2 million under the Liberty Bank Facility, which includes accrued interest; capitalize a reserve fund; and pay fees and expenses associated with the transaction. Prior to the closing of the 2016 Term Securitization, Bluegreen, as servicer, funded $11.3 million in connection with the servicer redemption of the notes related to BXG Receivables Note Trust 2007-A, and certain of the timeshare loans in such trust were sold to the 2016 Trust in connection with the 2016 Term Securitization. In April 2016, Bluegreen, as servicer, funded $6.1 million in connection with the servicer redemption of the notes related to the BXG Receivables Note Trust 2008-A, and certain of the timeshare loans in such trust were sold to the 2016 Trust in connection with the 2016 Term Securitization. The remainder of the net proceeds from the 2016 Term Securitization of $36.0 million is expected to be used by Bluegreen for general corporate purposes.

While ownership of the timeshare receivables included in the 2016 Term Securitization is transferred and sold for legal purposes, the transfer of these timeshare receivables is accounted for as a secured borrowing for financial accounting purposes. Accordingly, no gain or loss was recognized as a result of this transaction. Subject to the performance of the collateral, Bluegreen will receive any excess cash flows generated by the receivables transferred under the 2016 Term Securitization (excess meaning after payments of customary fees, interest, and principal under the 2016 Term Securitization) on a pro-rata basis as borrowers make payments on their timeshare loans.

See Note 13 to the Consolidated Financial Statements included in the 2015 Annual Report for additional information with respect to Bluegreen’s receivable backed notes payable facilities.

As of June 30, 2016, Bluegreen was in compliance with all financial debt covenants under its debt instruments.

Junior Subordinated Debentures

Woodbridge and Bluegreen Junior Subordinated Debentures

Woodbridge and Bluegreen have each formed statutory business trusts which issued trust preferred securities and invested the proceeds thereof in junior subordinated debentures of Woodbridge and Bluegreen, respectively. These trusts are variable interest entities in which Woodbridge and Bluegreen, respectively, are not the primary beneficiaries as defined by the accounting guidance for the consolidation of variable interest entities. Accordingly, the Company and its subsidiaries do not consolidate the operations of these business trusts; instead, the trusts are accounted for under the equity method of accounting. Interest on the junior subordinated debentures and distributions on the trust preferred securities are payable quarterly in arrears at the same interest rate. During the six months ended June 30, 2016, there were no significant changes related to Woodbridge’s $83.3 million of junior subordinated debentures (net of $1.8 million of unamortized debt issuance costs) or Bluegreen’s $68.2 million of junior subordinated debentures (net of $40.2 million of purchase accounting adjustments and unamortized debt issuance costs).