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

9 Months Ended

Sep. 30, 2019

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

The principal amount of the Company’s outstanding debt totaled approximately $1.0 billion at September 30, 2019, of which approximately $948.1 million was fixed-rate debt and approximately $75.0 million was variable rate debt outstanding under the credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of September 30, 2019.

At September 30, 2019, the Company had a $400.0 million credit facility comprised of a $325.0 million revolving facility and a $75.0 million term loan. As of September 30, 2019, the applicable spread for borrowings is 135 basis points under the revolving credit facility and 130 basis points under the term loan. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the credit facility. Letters of credit may be issued under the revolving credit facility. As of September 30, 2019, based on the value of the Company’s unencumbered properties, approximately $296.3 million was available under the revolving credit facility, there was no outstanding balance and approximately $185,000 was committed for letters of credit.

On January 4, 2019, the Company repaid in full the remaining balance of the mortgage loan secured by Countryside Marketplace, which was scheduled to mature in July 2019.

On January 10, 2019, the Company closed on a 15-year, non-recourse $22.1 million mortgage loan secured by Olde Forte Village. The loan matures in 2034, bears interest at a fixed-rate of 4.65%, requires monthly principal and interest payments of $124,700 based on a 25-year amortization schedule and requires a final payment of $12.1 million. Proceeds were partially used to repay in full the existing mortgage secured by Olde Forte Village, which was scheduled to mature in May 2019.

On June 3, 2019, the Company repaid in full the remaining balance of the mortgage loan secured by Briggs Chaney Marketplace, which was scheduled to mature in September 2019.

Saul Centers is a guarantor of the credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Park Van Ness loan (approximately $10.0 million of the $68.5 million outstanding balance at September 30, 2019, which guarantee will be reduced to (i) $6.7 million on October 1, 2019, (ii) $3.3 million on October 1, 2020 and (iii) zero on October 1, 2021), (b) a portion of the Kentlands Square II mortgage loan (approximately $8.6 million of the $34.3 million outstanding balance at September 30, 2019), and (c) a portion of the Broadlands Village mortgage (approximately $3.9 million of the $31.4 million outstanding balance at September 30, 2019). All other notes payable are non-recourse.

At December 31, 2018, the principal amount of the Company’s outstanding debt totaled approximately $1.0 billion, of which $910.2 million was fixed rate debt and $122.0 million was variable rate debt, including $47.0 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of December 31, 2018.

At September 30, 2019, 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, 2019	$	—	$	7,384	$	7,384
2020	61,163		28,536		89,699
2021	11,012		28,333		39,345
2022	36,503		28,923		65,426
2023	84,225		29,313		113,538
2024	66,645		27,908		94,553
Thereafter	497,257		115,902		613,159
Principal amount	$	756,805	$	266,299	1,023,104
Unamortized deferred debt costs					8,376
Net					$	1,014,728

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the term loan facility. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaled $8.4 million and $10.3 million, net of accumulated amortization of $6.7 million and $7.3 million, at September 30, 2019 and December 31, 2018, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets. At September 30, 2019, deferred debt costs related to the revolving credit facility, which had no outstanding balance, totaling $1.3 million, net of accumulated amortization of $0.9 million, are included in Other Assets in the Consolidated Balance Sheets.

Interest expense, net and amortization of deferred debt costs for the three and nine months ended September 30, 2019 and 2018, were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2019			2018			2019			2018
Interest incurred	$	13,103		$	12,361		$	38,972		$	36,863
Amortization of deferred debt costs	370			377			1,130			1,224
Capitalized interest	(3,088		)	(1,716		)	(7,756		)	(4,301		)
Interest expense	10,385			11,022			32,346			33,786
Less: Interest income	60			48			161			218
Interest expense, net and amortization of deferred debt costs	$	10,325		$	10,974		$	32,185		$	33,568