Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

The Company’s outstanding debt totaled approximately $869.4 million at September 30, 2015, of which approximately $824.5 million was fixed-rate debt and approximately $44.9 million was variable rate debt, including $30.0 million outstanding on the Company's unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled $860.5 million as of September 30, 2015.

At September 30, 2015, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit. The revolving credit facility matures on June 23, 2018, and may be extended by the Company for one additional year subject to the Company’s satisfaction of certain conditions. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the revolving credit facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2015, based on the value of the Company’s unencumbered properties, approximately $244.6 million was available under the line, $30.0 million was outstanding and approximately $448,000 was committed for letters of credit. The interest rate under the facility is variable and equals the sum of one-month LIBOR and a margin that is based on the Company’s leverage ratio, and which can range from 145 basis points to 200 basis points. As of September 30, 2015, the margin was 145 basis points.

At September 30, 2015, the Company had a $71.6 million construction-to-permanent loan, with $31.4 million outstanding, which is secured by and will be used to partially finance the construction of Park Van Ness.

On March 3, 2015, the Company closed on a 15-year, non-recourse $30.0 million mortgage loan secured by Shops at Fairfax and Boulevard. The loan matures in 2030, bears interest at a fixed rate of 3.69%, requires monthly principal and interest payments totaling $153,300 based on a 25-year amortization schedule and requires a final payment of $15.5 million at maturity. Proceeds were used to pay off the remaining balance of existing debt secured by Shops at Fairfax and Boulevard and to reduce outstanding borrowings under the revolving credit facility.

On April 1, 2015, the Company closed on a 15-year, non-recourse $16.0 million mortgage loan secured by Northrock. The loan matures in 2030, bears interest at a fixed rate of 3.99%, requires monthly principal and interest payments totaling $84,400 based on a 25-year amortization schedule and requires a final payment of $8.4 million at maturity. Proceeds were used to pay off the remaining balance of existing debt secured by Northrock.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.9 million outstanding at September 30, 2015) and (b) the $71.6 million Park Van Ness construction-to-permanent loan, which guarantee will be reduced and eventually eliminated subject to the achievement of certain leasing and cash flow levels. The fixed-rate notes payable are all non-recourse.

The Company accounts for the sale-leaseback of the Olney Center as a secured financing and, accordingly, the $11.0 million proceeds from the sale are included in notes payable. Monthly payments of approximately $60,400, which increase by 1.5% annually, are required under the lease and interest accrues at a fixed rate of 8.0%, which is the implicit rate under the lease. The purchaser has the right to sell the property to the Company at any time from and after April 2016 at a price equal to $11.0 million increased by 1.5% annually beginning January 1, 2015 and continuing each January thereafter. The Company has an option to repurchase the property for $14.6 million when the lease expires in April 2034.

At December 31, 2014, the Company’s outstanding debt totaled approximately $857.4 million, of which $784.8 million was fixed rate debt and $72.6 million was variable rate debt, including $43.0 million outstanding on the Company’s unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled $895.5 million as of December 31, 2014.

At September 30, 2015, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:



(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2015	$	—		$	5,954	$	5,954
2016	14,724			24,413		39,137
2017	—			25,716		25,716
2018	57,748		(a)	25,902		83,650
2019	60,793			24,615		85,408
2020	61,163			21,893		83,056
Thereafter	418,770			127,712		546,482
	$	613,198		$	256,205	$	869,403

(a) Includes $30.0 million outstanding under the line of credit.

Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2015 and 2014, were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2015			2014			2015			2014
Interest incurred	$	11,489		$	11,415		$	34,287		$	33,998
Amortization of deferred debt costs	340			355			1,094			969
Capitalized interest	(600		)	(186		)	(1,393		)	(430		)
	$	11,229		$	11,584		$	33,988		$	34,537