Notes Payable, Net

12 Months Ended

Dec. 31, 2019

Notes Payable, Net

Notes payable, net at December 31, 2019 and 2018 consist of the following:



	2019				2018				Stated Interest Rate as of 12/31/2019		Maturity Date	Number of Extension Options	Facility Amount
Cherry Creek Shopping Center	$	550,000			$	550,000			3.85%		06/01/28
City Creek Center	75,359			⁽¹⁾	77,068			⁽¹⁾	4.37%		08/01/23
Great Lakes Crossing Outlets	193,515				198,625				3.60%		01/06/23
The Mall at Green Hills	150,000				150,000				LIBOR+1.45% LIBOR capped at 3.00%		12/01/20
International Market Place	250,000				250,000				LIBOR + 2.15%		08/09/21	Two, one-year options
The Mall at Short Hills	1,000,000				1,000,000				3.48%		10/01/27
Twelve Oaks Mall	292,311				296,815				4.85%		03/06/28
U.S. Headquarters	12,000				12,000				LIBOR + 1.40% Swapped to 3.49%		03/01/24
$65M Revolving Credit Facility					34,675				LIBOR + 1.40%		04/25/20		65,000	⁽²⁾
$1.1B Revolving Credit Facility	675,000			^{(3) (4)}	725,000				LIBOR + 1.38%	⁽³⁾	02/01/24	Two, six-month options	1,100,000	⁽³⁾
$300M Unsecured Term Loan					300,000			⁽⁵⁾		⁽⁵⁾
$275M Unsecured Term Loan	275,000			^{(4) (5) (6)}					LIBOR + 1.55%	⁽⁶⁾	02/01/25
$250M Unsecured Term Loan	250,000			⁽⁷⁾	250,000				LIBOR + 1.60%	⁽⁷⁾	03/31/23
Deferred Financing Costs, Net	(12,857		)		(13,988		)
	$	3,710,327			$	3,830,195


(1)	TRG has provided a limited guarantee of the repayment of the City Creek Center loan, which could be triggered only upon a decline in center occupancy to a level that we believe is remote.


(2)	The unused borrowing capacity at December 31, 2019 was $55.3 million, after considering $9.7 million of letters of credit outstanding on the facility.

(3)

TRG is the borrower under the $1.1 billion primary unsecured revolving credit facility. As of December 31, 2019, the interest rate on the facility was a range of LIBOR plus 1.05% to 1.60% and a facility fee of 0.20% to 0.25% based on our total leverage ratio. The unused borrowing capacity at December 31, 2019 was $367.5 million. The LIBOR rate is swapped to a fixed rate of 2.14% until February 2022 on $25 million of the $1.1 billion TRG revolving credit facility. This results in an effective interest rate in the range of 3.19% to 3.74% until February 2022 on $25 million of the credit facility balance (Note 10).

(4)

The $1.1 billion primary unsecured revolving line of credit includes an accordion feature, which in combination with the $275 million unsecured term loan would increase our maximum aggregate total commitment to $2.0 billion between the two facilities if fully exercised, subject to obtaining additional lender commitments, customary closing conditions, covenant compliance, and minimum asset values for the unencumbered asset pool. As of December 31, 2019, we could not fully utilize the accordion feature unless additional assets were added to the unencumbered asset pool.

(5)

In October 2019, we amended and restated our unsecured term loan, which reduced the loan amount from $300 million to $275 million and extended the maturity date from February 2022 to February 2025. The $300 million loan bore interest at a range of LIBOR plus 1.25% to 1.90% based on our total leverage ratio. The LIBOR rate was swapped to a fixed interest rate of 2.14%, resulting in an effective interest rate in the range of 3.39% to 4.04%.


(6)	The $275 million unsecured term loan bears interest at a range of LIBOR plus 1.15% to 1.80% based on our total leverage ratio. The LIBOR rate is swapped to a fixed rate of 2.14% until February 2022, which results in an effective interest rate in the range of 3.29% to 3.94% until February 2022.

(7)

The $250 million unsecured term loan includes an accordion feature, which would increase our maximum aggregate total commitment to $400 million if fully exercised, subject to obtaining additional lender commitments, customary closing conditions, covenant compliance, and minimum asset values for the unencumbered asset pool. As of December 31, 2019, we could not utilize the accordion feature unless additional assets were added to the unencumbered asset pool. The loan bears interest at a range of LIBOR plus 1.25% to 1.90% based on our total leverage ratio. Through the term of the loan, the LIBOR rate is swapped to a fixed rate of 3.02%, which results in an effective interest rate in the range of 4.27% to 4.92% (Note 10).


(8)	Amounts in table may not add due to rounding.

Notes payable are collateralized by properties with a net book value of $1.7 billion at December 31, 2019.

The following table presents scheduled principal payments on notes payable as of December 31, 2019:



2020	$	161,747
2021	262,329			₍₁₎
2022	12,867
2023	502,278
2024	692,715			₍₂₎
Thereafter	2,091,249
Total principal maturities	$	3,723,185
Net unamortized deferred financing costs	(12,857		)
Total notes payable, net	$	3,710,327


(1)	Includes $250.0 million with two one-year extension options.


(2)	Includes $675.0 million with two, six-month extension options

2020 Maturities

The loan for The Mall at Green Hills matures in December 2020. We are currently evaluating options related to refinancing this loan.

Debt Covenants and Guarantees

Certain loan agreements contain various restrictive covenants, including the following corporate covenants on our primary unsecured revolving line of credit, as well as our unsecured term loans and the loan on International Market Place: a minimum net worth requirement, a maximum total leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum recourse secured debt ratio, and a maximum payout ratio. In addition, our primary unsecured revolving line of credit and unsecured term loans have unencumbered pool covenants, which currently apply to Beverly Center, Dolphin Mall, and The Gardens on El Paseo on a combined basis as of December 31, 2019. These covenants include a minimum number and minimum value of eligible unencumbered assets, a maximum unencumbered leverage ratio, a minimum unencumbered interest coverage ratio, and a minimum unencumbered asset occupancy ratio. As of December 31, 2019, the corporate total leverage ratio was the most restrictive covenant. We were in compliance with all of our covenants and loan obligations as of December 31, 2019. The maximum payout ratio covenant limits the payment of distributions generally to 95% of funds from operations, as defined in the loan agreements, except as required to maintain our tax status, pay preferred distributions, and for distributions related to the sale of certain assets.

In connection with the August 2018 financing at International Market Place, TRG has provided an unconditional guarantee of the loan principal balance and all accrued but unpaid interest during the term of the loan. The $250 million loan is interest only during the initial three year term with principal amortization required during the extension periods, if exercised. Accrued but unpaid interest as of December 31, 2019 was $0.8 million. We believe the likelihood of a repayment under the guarantee to be remote.

In connection with the $175 million additional financing at International Plaza, which is owned by an UJV, TRG provided an unconditional and several guarantee of 50.1% of all obligations and liabilities related to an interest rate swap that was required on the debt for the term of the loan. As of December 31, 2019, the interest rate swap was a $0.8 million liability and accrued but unpaid interest was less than $0.1 million. We believe the likelihood of a payment under the guarantee to be remote.

Beneficial Interest in Debt and Interest Expense

TRG's beneficial interest in the debt, capitalized interest, and interest expense of our consolidated subsidiaries and our UJVs is summarized in the following table. TRG's beneficial interest in the consolidated subsidiaries excludes debt and interest related to the noncontrolling interest in Cherry Creek Shopping Center (50%) and International Market Place (6.5%).



	At 100%					At Beneficial Interest
	Consolidated Subsidiaries			Unconsolidated Joint Ventures		Consolidated Subsidiaries			Unconsolidated Joint Ventures
Debt as of:
December 31, 2019	$	3,710,327		$	3,049,737	$	3,419,625		$	1,508,506
December 31, 2018	3,830,195			2,815,617		3,539,588			1,437,445

Capitalized interest:
Year Ended December 31, 2019	$	7,807	⁽¹⁾	$	330	$	7,767	⁽¹⁾	$	196
Year Ended December 31, 2018	15,221		⁽¹⁾	30		15,133		⁽¹⁾	18

Interest expense:
Year Ended December 31, 2019	$	148,407		$	139,756	$	136,694		$	69,749
Year Ended December 31, 2018	133,197			132,669		121,166			68,225

(1)

We capitalize interest costs incurred in funding our equity contributions to development projects accounted for as UJVs. The capitalized interest cost is included at our basis in our investment in UJVs. Such capitalized interest reduces interest expense on the Consolidated Statement of Operations and Comprehensive Income (Loss) and in the table above is included within Consolidated Subsidiaries.