NOTE 10 – BORROWINGS

The Company’s borrowings at December 31, 2017 and 2016, net of deferred financing costs and incorporating the impact of interest rate swaps on our effective interest rates, are summarized below:


		As of December 31, 2017
(Dollars in thousands)		Maturity Date	Contractual Facility		Balance, Gross		Balance, Net(3)		Stated Interest Rate	Effective Interest Rate (1)
Denominated in USD
	Trust Preferred Securities (USA)	April 30, 2027	$	27,913	$	27,913	$	27,554	5.38%	5.38%
	Bank of America Credit Facility (USA)	November 28, 2019		55,000		31,000		31,000	4.57%	4.57%
	Bank of America Line of Credit (USA)	October 31, 2019		5,000		-		--	4.57%	4.57%
	Cinema 1, 2, 3 Term Loan (USA)	September 1, 2019		19,500		19,500		19,105	3.25%	3.25%
	Minetta & Orpheum Theatres Loan (USA)	June 1, 2018		7,500		7,500		7,470	4.13%	4.13%
	U.S. Corporate Office Term Loan (USA)(4)	January 1, 2027		9,719		9,719		9,582	4.64% / 4.44%	4.61%
	Union Square Construction Financing (USA)	December 29, 2019		57,500		8,000		5,033	5.81%	5.81%
Denominated in foreign currency ("FC")(2)
	NAB Corporate Loan Facility (AU)	June 30, 2019		51,970		30,869		30,781	3.66%	3.66%
	Westpac Bank Corporate (general/non-construction) Credit Facility (NZ)	December 31, 2019		24,850		--		--	3.70%	3.70%
	Westpac Bank Corporate (construction) Credit Facility (NZ)	December 31, 2019		12,780		--		--	3.70%	3.70%
Total			$	271,732	$	134,501	$	130,525

(1) Both interest rate derivatives associated with the Trust Preferred Securities and Bank of America Credit Facility expired in October 2017 so the effective interest rate no longer applies as of December 31, 2017.

(2) The contractual facilities and outstanding balances of the FC-denominated borrowings were translated into U.S. dollars based on exchange rates as of December 31, 2017.

(3) Net of deferred financing costs amounting to $4.0 million.

(4) In June 2017 we received $1.5M in additional financing on our new U.S. Corporate Headquarters with Citizens Asset Finance, Inc. due to the reappraisal of the property.


		As of December 31, 2016
(Dollars in thousands)		Maturity Date	Contractual Facility		Balance, Gross		Balance, Net(3)		Stated Interest Rate	Effective Interest Rate (1)
Denominated in USD
	Trust Preferred Securities (USA)	April 30, 2027	$	27,913	$	27,913	$	27,340	4.89%	5.20%
	Bank of America Credit Facility (USA)	November 28, 2019		55,000		39,950		39,759	3.27%	3.90%
	Bank of America Line of Credit (USA)	October 31, 2017		5,000		--		--	3.77%	3.77%
	Cinema 1, 2, 3 Term Loan (USA)(4)	September 1, 2019		19,901		19,901		19,356	3.25%	3.25%
	Minetta & Orpheum Theatres Loan (USA)(4)	June 1, 2018		7,500		7,500		7,398	3.38%	3.38%
	U.S. Corporate Office Term Loan (USA)(4)	January 1, 2027		8,363		8,363		8,239	4.64%	4.64%
	Union Square Construction Financing (USA)(4)	December 29, 2019		57,500		8,000		4,751	4.52%	4.52%
Denominated in FC (2)
	NAB Corporate Loan Facility (AU)	June 30, 2019		48,080		28,558		28,421	2.64%	2.64%
	Westpac Bank Corporate Credit Facility (NZ)	March 31, 2018		36,877		8,350		8,350	3.80%	3.80%
Total			$	266,134	$	148,535	$	143,614

(1) Effective interest rate includes the impact of interest rate derivatives hedging the interest rate risk associated with Trust Preferred Securities and Bank of America Credit Facility that were outstanding as of December 31, 2016.

(2) The contractual facilities and outstanding balances of the FC-denominated borrowings were translated into U.S. dollar based on exchange rates as of December 31, 2016.

(3) Net of deferred financing costs amounting to $4.9 million.

(4) The loan for our Minetta & Orpheum Theatres was obtained from Santander Bank. The term loan for our Cinema 1,2,3 Theatre was refinanced during the third quarter of 2016 with Valley National Bank. The term loan, which is collateralized by our new U.S Corporate Headquarters office building, was obtained with Citizens Asset Finance, Inc. In December 2016, we successfully negotiated the construction financing for our Union Square redevelopment project, $8.0 million of which was advanced from the total construction loan limit of $57.5 million.

Our loan arrangements are presented, net of the deferred financing costs, on the face of our consolidated balance sheet as follows:


	Dollars in thousands
Balance Sheet Caption	December 31, 2017		December 31, 2016
Debt - current portion	$	8,109	$	567
Debt - long-term portion		94,862		115,707
Subordinated debt		27,554		27,340
Total borrowings	$	130,525	$	143,614

Debt denominated in USD

Trust Preferred Securities (“TPS”)

On February 5, 2007, we issued $51.5 million in 20-year fully subordinated notes to a trust over which we have significant influence, which in turn issued $51.5 million in securities. Of the $51.5 million, $50.0 million in TPS were issued to unrelated investors in a private placement and $1.5 million of common trust securities were issued by the trust to Reading called “Investment in Reading International Trust I” on our balance sheets. Effective May 1, 2012, the interest rate on our Trust Preferred Securities changed from a fixed rate of 9.22%, which was in effect for five years, to a variable rate of three month LIBOR plus 4.00%, which will reset each quarter through the end of the loan unless we exercise our right to re-fix the rate at the current market rate at that time. There are no principal payments due until maturity in 2027 when the notes and the trust securities are scheduled to be paid in full. We may pay off the debt after the first five years at 100% of the principal amount without any penalty. The trust is essentially a pass through, and the transaction is accounted for on our books as the issuance of fully subordinated notes. The credit facility includes a number of affirmative and negative covenants designed to monitor our ability to service the debt. The most restrictive covenant of the facility requires that we must maintain a fixed charge coverage ratio at a certain level. However, on December 31, 2008, we secured a waiver of all financial covenants with respect to our TPS for a period of nine years (through December 31, 2017), in consideration of the payment of $1.6 million, consisting of an initial payment of $1.1 million, a payment of $270,000 made in December 2011, and a payment of $270,000 in December 2014. The covenant wavier expired January 1, 2018 so covenant compliance will begin starting with Q1 2018.

During the first quarter of 2009, we took advantage of the then current market illiquidity for securities such as our TPS to repurchase $22.9 million in face value of those securities through an exchange of $11.5 million worth of marketable securities purchased during the period for the express purpose of executing this exchange transaction with the third party holder of these TPS. During the twelve months ended 2009, we amortized $106,000 of discount to interest income associated with the holding of these securities prior to their extinguishment. On April 30, 2009, we extinguished $22.9 million of these TPS, which resulted in a gain on retirement of subordinated debt (TPS) of $10.7 million net of loss on the associated write-off of deferred loan costs of $749,000 and a reduction in our Investment in Reading International Trust I from $1.5 million to $838,000.

During the three years ended December 31, 2017, we paid $1.4 million in each year in preferred dividends to unrelated investors that are included in interest expense. At December 31, 2017 and 2016, we had preferred dividends payable of $250,000 and $184,000, respectively. Interest payments for this loan are required every three months.

Bank of America Credit Facility

On March 3, 2016, we amended our $55.0 million credit facility with Bank of America to permit real property acquisition loans. This amendment was subject to the provision that the consolidated leverage ratio would be reduced by 0.25% from the established levels in the credit facility during the period of such borrowing subject further to a repayment of such borrowings on the earlier of the eighteen months from the date of such borrowing or the maturity date of the credit agreement. Such modification was not considered substantial under US GAAP.

Bank of America Line of Credit

In October 2016, the term of this line of credit was extended for another two (2) years until October 31, 2019. Such modification was not considered to be substantial under US GAAP.

Cinemas 1,2,3 Term Loan and Line of Credit

On August 31, 2016, Sutton Hill Properties LLC (“SHP”), a 75% subsidiary of RDI, refinanced its $15 million Santander Bank term loan with a new lender, Valley National Bank. This new $20 million loan is collateralized by our Cinema 1,2,3 property and bears an interest rate of 3.25% per annum, with principal installments and accruing interest paid monthly. The new loan matures on September 1, 2019, with a one-time option to extend maturity date for another year.

Minetta and Orpheum Theatres Term Loan

In May 2013, we refinanced our Liberty Theaters loan with a $7.5 million loan, secured by our Minetta and Orpheum theatres, thus releasing the Royal George Theatre from the security and leaving it unencumbered. This new loan has a maturity date of June 1, 2018, and an interest rate of 2.75% above LIBOR. We are currently working on a long term renewal with the current lender Santander.

Union Square Construction Financing

On December 29, 2016, we closed our new construction finance facilities totaling $57.5 million to fund the non-equity portion of the anticipated construction costs of the redevelopment of our property at 44 Union Square in New York City. The combined facilities consist of $50 million in aggregate loans (comprised of three loan tranches) from Bank of the Ozarks (“BOTO”), and a $7.5 million mezzanine loan from Tammany Mezz Investor, LLC, an affiliate of Fisher Brothers. As of December 31, 2016, Bank of the Ozarks advanced $8.0 million to repay the existing $8.0 million loan with East West Bank.

Presented in the table below is the breakdown of the Union Square construction financing as of December 31, 2017:


(Dollars in thousands)		Facility Limits and Advances
Financing Component	Lender	Facility Limit		Advanced-to- Date		Remaining Facility		Interest Rate(1)	Maturity Date(2)
Mezzanine loan	Tammany Mezz Investor LLC	$	7,500	$	--	$	7,500	Greater of (i) 10.50% and (ii) Adjusted LIBOR + 10%	December 29, 2019
Senior loan	Bank of the Ozarks		8,000		8,000		--	Greater of (i) 4.75% and (ii) Adjusted LIBOR + 4.25%	December 29, 2019
Building loan	Bank of the Ozarks		31,130		--		31,130	Greater of (i) 4.75% and (ii) Adjusted LIBOR + 4.25%	December 29, 2019
Project loan	Bank of the Ozarks		10,870		--		10,870	Greater of (i) 4.75% and (ii) Adjusted LIBOR + 4.25%	December 29, 2019
Total Union Square Financing		$	57,500	$	8,000	$	49,500

(1) Not to exceed the New York State maximum lawful borrowing rate, which typically is 16%.

(2) Allowable for up to two (2) extension request options, one (1) year for each extension request.

U.S. Corporate Office Term Loan

On December 13, 2016, we obtained a ten-year $8.4 million mortgage loan on our new Los Angeles Corporate Headquarters at a fixed annual interest rate of 4.64%. This loan provided for a second loan upon completion of certain improvements. On June 26, 2017, we obtained a further $1.5 million under this provision at a fixed annual interest rate of 4.44%.

Debt denominated in foreign currencies

Australian NAB Corporate Loan Facility

On December 23, 2015, we amended our Reading Entertainment Australia Term Loan and Corporate Credit Facility with National Australia Bank (“NAB”), from a three-tiered facility comprised of (1) the Bank Bill Discount Facility with a limit of AU$61.3 million, an interest rate of 2.35% above the Bank Bill Swap Bid Rate (BBSY), and amortization at AU$2.0 million per year; (2) the Bill Discount Facility – Revolving with a limit of AU$10.0 million and an interest rate of 1.50% above the BBSY on any undrawn portion; and (3) the Bank Guarantee Facility with a facility limit of AU$5.0 million, into a $48.1 million (AU$66.5 million) Revolving Corporate Markets Loan facility. The new facility has an interest rate of 0.95% above BBSY on any outstanding borrowings and an unchanged maturity date of June 30, 2019. In addition, we will incur a facility fee of 0.95% per annum. We also have a $3.6 million (AU$5.0 million) Bank Guarantee facility at a rate of 1.90% per annum. The modifications of this particular term loan were not considered to be substantial under US GAAP.

New Zealand Westpac Bank Corporate Credit Facility

On December 15, 2017, we extended the maturity of the 1st tranche (general/non-construction credit line) of our Westpac Corporate Credit Facility to December 31, 2019. Prior to this on April 26, 2017, we extended the maturity of our entire Westpac Corporate Credit Facility, $37.6 million (NZ$53.0 million) to December 31, 2018, from March 31, 2018. We are currently working on a longer-term renewal of our Westpac Corporate Credit Facility which will replace the existing facility.

In October 2016, we amended our $34.8 million (NZ$50.0 million) credit facility with Westpac Bank to provide a $2.1 million (NZ$3.0 million) increase, thereby amending the total credit facility to $36.9 million (NZ$53.0 million). The increase in the credit facility was specific to the second tranche of our credit facility which is a dedicated construction facility, now of $12.5 million (NZ$18.0 million) from the original limit of $10.4 million (NZ$15.0 million). No drawdowns have been made against the second tranche to date. This modification was not considered substantial under U.S. GAAP.

Previously, on May 21, 2015, we refinanced our existing New Zealand Corporate Credit Facility with a $34.2 million (NZ$50.0 million) facility with the same bank (Westpac Bank), bearing an interest rate of 1.75% above Bank Bill Bid Rate and maturing on March 31, 2018. The facility is broken into two tranches, one a $23.9 million (NZ$35.0 million) credit facility and the second tranche for a $10.3 million (NZ$15.0 million) facility to be used for construction funding.

As of December 31, 2017, our aggregate amount of future principal debt payments is estimated as follows:


(Dollars in thousands)	Future Principal Debt Payments
2018	$	8,139
2019		89,190
2020		248
2021		258
2022		270
Thereafter		36,400
Total future principal debt payments	$	134,505

The estimated amount of future principal payments in U.S. dollars is subject to change because the payments in U.S. dollars on the debt denominated in foreign currencies, which represents a significant portion of our total outstanding debt balance, will fluctuate based on the applicable foreign currency exchange rates.