(8) NOTES PAYABLE:

Notes payable, net consist of:


	April 30,
	2020		2019
	(in thousands)
Real estate notes payable	$	3,894	$	1,384
Unamortized debt issuance costs		(4)		(65)
	$	3,890	$	1,319

Given below is a description of outstanding financing facilities as of April 30, 2020:

Lomas Encantadas Subdivision. In 2020, Lomas Encantadas Development Company LLC (“LEDC”), a subsidiary of the Company, entered into a Development Loan Agreement with BOKF, NA dba Bank of Albuquerque (“BOKF”). The Development Loan Agreement is evidenced by a Non-Revolving Line of Credit Promissory Note and is secured by a Mortgage, Security Agreement and Financing Statement, between LEDC and BOKF with respect to certain planned residential lots within the Lomas Encantadas subdivision located in Rio Rancho, New Mexico. Pursuant to a Guaranty Agreement entered into by AMREP Southwest Inc. (“ASW”), a subsidiary of the Company, in favor of BOKF, ASW guaranteed LEDC’s obligations under each of the above agreements.

Available Principal: BOKF agreed to lend up to $2,475,000 to LEDC on a non-revolving line of credit basis to partially fund the development of certain planned residential lots within the Lomas Encantadas subdivision.

Outstanding Principal Amount and Repayments: The outstanding principal amount of the loan was $1,576,000 as of April 30, 2020 and LEDC made principal repayments of $675,000 during 2020. LEDC is required to make periodic principal repayments of borrowed funds not previously repaid as follows: $900,000 on or before March 17, 2021, $300,000 on or before June 17, 2021, $300,000 on or before September 17, 2021, $262,500 on or before December 17, 2021, $525,000 on or before March 17, 2022 and $187,500 on or before June 17, 2022. The outstanding principal amount of the loan may be prepaid at any time without penalty.

Maturity Date: The loan is scheduled to mature in June 2022.

Interest Rate: Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly. The interest rate on the loan at April 30, 2020 was 4.0%.

Lot Release Price: BOKF is required to release the lien of its mortgage on any lot upon LEDC making a principal payment of $37,500.

LEDC and ASW made certain representations and warranties in connection with this loan and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including LEDC’s failure to make principal, interest or other payments when due; the failure of LEDC or ASW to observe or perform their respective covenants under the loan documentation; the representations and warranties of LEDC or ASW being false; the insolvency or bankruptcy of LEDC or ASW; and the failure of ASW to maintain a tangible net worth of at least $32 million. Upon the occurrence and during the continuance of an event of default, BOKF may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. LEDC incurred customary costs and expenses and paid certain fees to BOKF in connection with the loan. At April 30, 2020, both LEDC and ASW were in compliance with the financial covenants contained in the loan. The total book value of the property within the Lomas Encantadas subdivision mortgaged to BOKF under this loan was $3,027,000 as of April 30, 2020. The Company capitalized interest and fees related to this loan of $47,000 in 2020.

Hawk Site Subdivision. In 2020, Mountain Hawk East Development Company LLC (“MHEDC”), a subsidiary of the Company, entered into a Business Loan Agreement with Sandia Laboratory Federal Credit Union (“SLFCU”). The Business Loan Agreement is evidenced by a Promissory Note, and is secured by a Line of Credit Mortgage, between MHEDC and SLFCU, with respect to certain planned residential lots within the Hawk Site subdivision located in Rio Rancho, New Mexico. Pursuant to a Commercial Guaranty entered into by ASW in favor of SLFCU, ASW guaranteed MHEDC’s obligations under each of the above agreements.

Available Principal: SLFCU agreed to lend up to $3,000,000 to MHEDC on a revolving line of credit basis to partially fund the development of certain planned residential lots within the Hawk Site subdivision. The maximum principal available under the loan will be limited to 75% of the bulk discounted value of the lots to be developed with the loan proceeds.

Outstanding Principal Amount: The outstanding principal amount of the loan was $41,000 as of April 30, 2020 and MHEDC did not make any principal repayments during 2020.

Maturity Date: The loan is scheduled to mature on August 1, 2022.

Interest Payments: Interest on the outstanding principal amount of the loan is payable monthly at the fixed annual rate of 4.5%.

Principal Payments: SLFCU is required to release the lien of its mortgage on any lot upon MHEDC making a principal payment equal to $52,000 per lot. On the maturity date, MHEDC will be required to make a final payment of all outstanding principal and accrued and unpaid interest. The outstanding principal amount of the loan may be prepaid at any time without penalty.

MHEDC and ASW made certain representations and warranties in connection with this loan and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including: MHEDC’s failure to make principal, interest or other payments when due; the failure of MHEDC or ASW to observe or perform their respective covenants under the loan documentation; the representations and warranties of MHEDC or ASW being false; the insolvency or bankruptcy of MHEDC or ASW; and the failure of ASW to maintain a tangible net worth of at least $29 million. Upon the occurrence and during the continuance of an event of default, SLFCU may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. MHEDC incurred certain customary costs and expenses and paid certain fees to SLFCU in connection with the loan. At April 30, 2020, both MHEDC and ASW were in compliance with the financial covenants contained in the loan. The total book value of the property within the Hawk Site subdivision mortgaged to SLFCU under this loan was $964,000 as of April 30, 2020. The Company capitalized interest and fees related to this loan of $42,000 in 2020.

Las Fuentes at Panorama Village Subdivision. In 2020, Las Fuentes Village II, LLC (“LFV”), a subsidiary of the Company, entered into a Loan Agreement with BOKF. The Loan Agreement is evidenced by a Non-Revolving Line of Credit Promissory Note and is secured by a Mortgage, Security Agreement and Financing Statement, between LFV and BOKF, with respect to the construction of an approximately 14,000 square foot, single tenant retail building on an approximately 1.3 acre property owned by LFV in the Las Fuentes at Panorama Village subdivision in Rio Rancho, New Mexico (the “LFV Mortgaged Property”). Pursuant to a Limited Guaranty Agreement entered into by ASW in favor of BOKF, ASW guaranteed LFV’s obligations under each of the above agreements.

Available Principal: BOKF agreed to lend up to $2,750,000 to LFV on a non-revolving line of credit basis to partially fund the construction of the single tenant retail building on the LFV Mortgaged Property.

Outstanding Principal Amount: The outstanding principal amount of the loan was $1,979,000 as of April 30, 2020 and LFV did not make any principal repayments during 2020.

Maturity Date: The loan is scheduled to mature on January 10, 2027.

Interest and Principal Payments:

During the period beginning on January 10, 2020 and ending on January 10, 2021, interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 2.9%, adjusted monthly. The outstanding principal amount of the loan may be prepaid without penalty while this interest rate is applicable to the loan. The interest rate on the loan at April 30, 2020 was 3.9%.

Beginning January 11, 2021, the interest rate with respect to the outstanding principal amount of the loan will be one of the following interest rates to be selected by LFV:

six-year fixed rate of interest equal to the weekly average yield on United States Treasury securities, adjusted to a constant maturity of seven years, plus a spread of 2.29%. The outstanding principal amount of the loan may be prepaid with a penalty while this interest rate is applicable to the loan.

six-year fixed rate of interest equal to the weekly average yield on United States Treasury securities, adjusted to a constant maturity of seven years, plus a spread of 3.21%. The outstanding principal amount of the loan may be prepaid without penalty while this interest rate is applicable to the loan.

three-year fixed rate of interest equal to the weekly average yield on United States Treasury securities, adjusted to a constant maturity of three years, plus a spread of 2.33%. The outstanding principal amount of the loan may be prepaid with a penalty while this interest rate is applicable to the loan.

three-year fixed rate of interest equal to the weekly average yield on United States Treasury securities, adjusted to a constant maturity of three years, plus a spread of 3.0%. The outstanding principal amount of the loan may be prepaid without penalty while this interest rate is applicable to the loan.

Beginning January 11, 2021, LFV will be required to make payments of principal and interest at the applicable interest rate on a monthly basis calculated based on a 25-year amortization. On the maturity date, LFV will be required to make a final payment of all outstanding principal and accrued and unpaid interest and any other unpaid sums.

LFV and ASW made certain representations and warranties in connection with this loan and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including: LFV’s failure to make principal, interest or other payments when due; the failure of LFV or ASW to observe or perform their respective covenants under the loan documentation; the representations and warranties of LFV or ASW being false; the insolvency or bankruptcy of LFV or ASW; and the failure of LFV to complete construction of the single tenant retail building on the LFV Mortgaged Property by January 10, 2021. Upon the occurrence and during the continuance of an event of default, BOKF may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. LFV incurred certain customary costs and expenses and paid certain fees to BOKF in connection with the loan. At April 30, 2020, both LFV and ASW were in compliance with the financial covenants contained in the loan. The total book value of the LFV Mortgaged Property was $2,487,000 as of April 30, 2020. The Company capitalized interest related to this loan of $7,000 in 2020.

SBA Paycheck Protection Program. In 2020, the Company received a loan from BOKF pursuant to the Paycheck Protection Program loan program administered by the U.S. Small Business Administration. The loan is evidenced by a note and is unsecured.

Outstanding Principal Amount: The Company received $298,000 pursuant to the loan.

Maturity Date: The loan is scheduled to mature on April 14, 2022.

Interest and Principal Payments: Interest on the outstanding principal amount of the loan accrues at the fixed annual rate of 1.0% beginning on the issuance date of the loan. Beginning in November 2020, the Company will be required to make payments of principal and interest on a monthly basis calculated based on an 18-month amortization. On the maturity date, the Company will be required to make a final payment of all outstanding principal and accrued and unpaid interest and any other unpaid sums. The outstanding principal amount of the loan may be prepaid at any time without penalty.

Loan Forgiveness: In accordance with the provisions of the Paycheck Protection Program loan program, the Company may apply for forgiveness of that part of the loan which was used during the 24 weeks from the receipt of the loan funds to pay eligible payroll costs, interest on a mortgage obligation incurred before February 2020, rent obligations under leases dated before February 2020 and utility obligations under services agreements dated before February 2020; provided that at least 75% of the forgivable amount was used for payroll costs.

The Company made certain representations and warranties in connection with this loan and is required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including: the Company’s failure to make principal, interest, tax or other payments when due; the failure of the Company to observe or perform its covenants under the loan documentation; the representations and warranties of the Company being false; the insolvency or bankruptcy of the Company; the default by the Company on any other loan with BOKF or another creditor; and the Company having an adverse change in financial condition or business operations. Upon the occurrence an event of default, BOKF may declare the outstanding principal amount and all other obligations under the loan immediately due and payable.

Refer to Note 17 for additional financing facilities entered into after April 30, 2020.

Given below is a description of financing facilities that were outstanding during 2019 or 2020 that have expired or terminated prior to April 30, 2020:

Lomas Encantadas Subdivision. In 2018, LEDC entered into a Development Loan Agreement with BOKF. The Development Loan Agreement was evidenced by a Non-Revolving Line of Credit Promissory Note and was secured by a Mortgage, Security Agreement and Financing Statement, between LEDC and BOKF with respect to certain planned residential lots within the Lomas Encantadas subdivision located in Rio Rancho, New Mexico. Pursuant to a Guaranty Agreement entered into by ASW in favor of BOKF, ASW guaranteed LEDC’s obligations under each of the above agreements.

Initial Available Principal: BOKF agreed to lend up to $4,750,000 to LEDC on a non-revolving line of credit basis to partially fund the development of certain planned residential lots within the Lomas Encantadas subdivision.

Outstanding Principal Amount and Repayments: The outstanding principal amount of the loan was $181,000 as of April 30, 2019. LEDC made principal repayments of $894,000 during 2020 and $3,234,000 during 2019. In 2020, the outstanding principal amount of the loan was fully repaid and the loan was terminated.

Maturity Date: The loan was scheduled to mature in December 2021.

Interest Rate: Interest on the outstanding principal amount of the loan was payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly.

Capitalized Interest: The Company capitalized interest and fees related to this loan of $27,000 in 2020 and $82,000 in 2019.

Hawk Site Subdivision.In 2019, Hawksite 27 Development Company, LLC (“HDC”), a subsidiary of the Company, entered into a Business Loan Agreement with Main Bank. The loan under the Business Loan Agreement was evidenced by a Promissory Note and was secured by a Mortgage, between HDC and Main Bank with respect to certain planned residential lots within the Hawk Site subdivision located in Rio Rancho, New Mexico. Pursuant to a Commercial Guaranty entered into by ASW in favor of Main Bank, ASW guaranteed HDC’s obligations under each of the above agreements.

Initial Available Principal: Main Bank agreed to lend up to $1,800,000 to HDC on a non-revolving line of credit basis to partially fund the development of certain planned residential lots within the Hawk Site subdivision.

Outstanding Principal Amount and Repayments: The outstanding principal amount of the loan was $1,203,000 as of April 30, 2019. HDC made principal repayments of $1,593,000 during 2020 and $390,000 during 2019. In 2020, the outstanding principal amount of the loan was fully repaid and the loan was terminated.

Maturity Date: The loan was scheduled to mature in July 2021.

Interest Rate: Interest on the outstanding principal amount of the loan was payable monthly at the annual rate equal to the Wall Street Journal Prime Rate plus a spread of 2.38%, adjusted annually.

Capitalized Interest: The Company capitalized interest and fees related to this loan of $59,000 in 2020 and $33,000 in 2019.

The following table summarizes the scheduled principal repayments subsequent to April 30, 2020:


	Scheduled Payments
Fiscal Year	(in thousands)
2021	$	3,036
2022		817
2023		41
2024		—
2025		—
Thereafter		—
Total	$	3,894