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

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

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

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

At March 31, 2022, the Company had a $525.0 million senior unsecured credit facility (the "Credit Facility") comprised of a $425.0 million revolving credit facility and a $100.0 million term loan. The revolving credit facility matures on August 29, 2025, which may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The term loan matures on February 26, 2027, and may not be extended. Interest accrues at a rate of LIBOR plus an applicable spread which is determined by certain leverage tests. As of March 31, 2022, the applicable spread for borrowings was 135 basis points related to the revolving credit facility and 130 basis points related to the term loan. Letters of credit may be issued under the Credit Facility. On March 31, 2022, based on the value of the Company’s unencumbered properties, approximately $233.5 million was available under the Credit Facility, $238.0 million was outstanding and approximately $185,000 was committed for letters of credit.

On February 23, 2022, the Company closed on a $133.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund Hampden House. The loan matures in 2040, bears interest at a fixed rate of 3.90%, and requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the first quarter of 2026, and thereafter, monthly principal and interest payments based on a 25-year amortization schedule will be required.

On March 11, 2022, the Company repaid in full the remaining principal balance of $28.3 million of the mortgage loan secured by Lansdowne Town Center, which was scheduled to mature in June 2022.

Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the Credit Facility. The Operating Partnership is the guarantor of (a) a portion of the Broadlands mortgage (approximately $3.7 million of the $29.5 million outstanding balance at March 31, 2022), (b) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $23.8 million outstanding balance at March 31, 2022), (c) a portion of The Waycroft mortgage (approximately $23.6 million of the $155.2 million outstanding balance at March 31, 2022), (d) the Ashbrook Marketplace mortgage (totaling $21.2 million at March 31, 2022), and (e) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands Pad (totaling $28.8 million at March 31, 2022). All other notes payable are non-recourse.

The principal amount of the Company’s outstanding debt totaled approximately $1.2 billion at March 31, 2022, of which approximately $912.6 million was fixed-rate debt and approximately $238.0 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 March 31, 2022.

At December 31, 2021, the principal amount of the Company’s outstanding debt totaled approximately $1.2 billion, of which $949.0 million was fixed rate debt and $206.0 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 December 31, 2021.

At March 31, 2022, 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
April 1 through December 31, 2022	$	8,555		$	25,513	$	34,068
2023	9,225			35,080		44,305
2024	66,164			34,652		100,816
2025	158,363		(a)	31,814		190,177
2026	134,088			28,474		162,562
2027	142,028		(b)	22,052		164,080
Thereafter	339,177			115,367		454,544
Principal amount	$	857,600		$	292,952	1,150,552
Unamortized deferred debt costs						10,697
Net						$	1,139,855

(a) Includes $138.0 million outstanding under the Credit Facility.

(b) Includes $100.0 million outstanding under the Credit Facility.

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the Credit 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 $10.7 million and $11.2 million, net of accumulated amortization of $7.7 million and $7.7 million, at March 31, 2022 and December 31, 2021, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

Interest expense, net and amortization of deferred debt costs for the three months ended March 31, 2022 and 2021, were as follows:

	Three Months Ended March 31,
(In thousands)	2022		2021
Interest incurred	$	12,313	$	12,681
Amortization of deferred debt costs	477		405
Capitalized interest	(2,187)		(1,095)
Interest expense	10,603		11,991
Less: Interest income	1		3
Interest expense, net and amortization of deferred debt costs	$	10,602	$	11,988