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DEBT | 3 Months Ended
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Mar. 31, 2021
Debt Disclosure [Abstract] |
DEBT | DEBT Our debt consisted of the following at March 31, 2021:
| March 31, 2021
Debt, excluding Timber Funds: |
Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.7% at March 31, 2021 (a) | $350,000 |
Senior Notes due 2022 at a fixed interest rate of 3.75% | 325,000 |
Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 2.0% at March 31, 2021 (b) | 300,000 |
2020 Incremental Term Loan Facility borrowings due 2025 at a variable interest rate of 2.0% at March 31, 2021 (c) | 250,000 |
New Zealand subsidiary noncontrolling interests shareholder loan due 2025 at a fixed interest rate of 2.95% | 24,074 |
Northwest Farm Credit Services Credit Facility with quarterly interest-only payments, collateralized by Core Timberlands, with the following tranches |
Due 2025 at a fixed interest rate of 6.1% | 11,512 |
Due 2028 at a fixed interest rate of 4.1% | 11,984 |
Due 2033 at a fixed interest rate of 5.3% | 19,363 |
Due 2036 at a fixed interest rate of 5.4% | 9,838 |
Total debt, excluding Timber Funds | 1,301,771 |
Less: Deferred financing costs, excluding Timber Funds | (2,338) |
Long-term debt, net of deferred financing costs, excluding Timber Funds | 1,299,433 |
Debt, Timber Funds: |
Fund II Mortgages Payable, collateralized by Fund II timberlands with quarterly interest payments, as follows: (d) |
Due 2022 at a variable interest rate of 2.0% at March 31, 2021 | 11,000 |
Due 2022 at a variable interest rate of 2.0% at March 31, 2021 | 14,000 |
Fund III Mortgages Payable, collateralized by Fund III timberlands with quarterly interest payments, as follows: (e) |
Due 2023 at a fixed interest rate of 5.1% | 19,431 |
Due 2024 at a fixed interest rate of 4.5% | 15,544 |
Total debt, Timber Funds | 59,975 |
Less: Deferred financing costs, Timber Funds | (8) |
Long-term debt, net of deferred financing costs, Timber Funds | 59,967 |
Long-term debt, net of deferred financing costs | $1,359,400 |
(a) As of March 31, 2021, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600%. We estimate the effective fixed interest rate on the term loan facility to be approximately 3.2% after consideration of interest rate swaps and estimated patronage refunds. (b) As of March 31, 2021, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.900%. We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 2.8% after consideration of interest rate swaps and estimated patronage refunds. (c) As of March 31, 2021, the periodic interest rate on the 2020 incremental term loan (the “2020 Incremental Term Loan Facility”) was LIBOR plus 1.850%. We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 2.3% after consideration of interest rate swaps and estimated patronage refunds. (d) As of March 31, 2021, the periodic interest rate on the Fund II Mortgages Payable was 3-month LIBOR plus 1.700%. (e) As of March 31, 2021, we estimate the effective fixed interest rate on the Fund III Mortgages Payable due 2023 and 2024 to be approximately 3.9% and 3.2%, respectively, after consideration of estimated patronage refunds. Principal payments due during the next five years and thereafter are as follows:
| Excluding Timber Funds | Timber Funds | Total
2021 | — |  | — |  | — |
2022 | 325,000 |  | 25,000 |  | 350,000 |
2023 | — |  | 17,980 |  | 17,980 |
2024 | — |  | 14,400 |  | 14,400 |
2025 | 284,074 |  | — |  | 284,074 |
Thereafter | 685,000 |  | — |  | 685,000 |
Total Debt | $1,294,074 |  | $57,380 |  | $1,351,454 |
2021 DEBT ACTIVITY U.S. Debt — Excluding Timber Funds During the three months ended March 31, 2021, we made no borrowings or repayments on our Revolving Credit Facility. At March 31, 2021, we had available borrowings of $299.1 million under the Revolving Credit Facility, net of $0.9 million to secure our outstanding letters of credit. U.S. Debt — Timber Funds On January 1, 2021, both Fund II Mortgages Payable transitioned from a fixed interest rate of 2.0% to a variable rate of 3-month LIBOR plus 1.700%. New Zealand During the three months ended March 31, 2021, the New Zealand subsidiary made no borrowings or repayments on its working capital facility. At March 31, 2021, the New Zealand subsidiary had NZ$20.0 million of available borrowings under its working capital facility. As of March 31, 2021, the outstanding balance on the shareholder loan is $24.1 million. Except for changes in the New Zealand foreign exchange rate, there have been no adjustments to the carrying value of the shareholder loan since its inception. See Note 6 — Noncontrolling Interests for more information regarding the New Zealand subsidiary. DEBT COVENANTS — EXCLUDING TIMBER FUNDS In connection with our $350 million Term Credit Agreement, $300 million Incremental Term Loan Agreement, $250 million 2020 Incremental Term Loan Agreement and $300 million Revolving Credit Facility, customary covenants must be met, the most significant of which include interest coverage and leverage ratios. The covenants listed below, which are the most significant financial covenants in effect as of March 31, 2021, are calculated on a trailing 12-month basis:
| Covenant Requirement |  | Actual Ratio |  | Favorable
Covenant EBITDA to consolidated interest expense should not be less than | 2.5 to 1 |  | 6.7 to 1 |  | 4.2
Covenant debt to covenant net worth plus covenant debt shall not exceed | 65 | % |  | 47 | % |  | 18 | %
In connection with our $45 million NWFCS Credit Facility, customary covenants must be met, the most significant of which include interest coverage and debt-to-capitalization ratios. The covenants listed below, which are the most significant financial covenants in effect as of March 31, 2021, are calculated on a trailing 12-month basis:
| Covenant Requirement |  | Actual Ratio |  | Favorable
Covenant loan-to-appraised value shall not exceed | 50% |  | 12% |  | 38 | %
Covenant EBITDA to consolidated interest expense should not be less than | 2.5 to 1 |  | 6.7 to 1 |  | 4.2
Covenant debt to covenant net worth plus covenant debt shall not exceed | 65 | % |  | 47 | % |  | 18 | %
In addition to these financial covenants listed above, the 2022 Notes, Term Credit Agreement, Incremental Term Loan Agreement, 2020 Incremental Term Loan Facility, Revolving Credit Facility, and NWFCS Credit Facility include customary covenants that limit the incurrence of debt and the disposition of assets, among others. At March 31, 2021, we were in compliance with all applicable covenants. DEBT COVENANTS — TIMBER FUNDS The Fund II Mortgages Payable to MetLife contain a requirement to maintain a loan-to-value ratio of less than 50%, with the denominator defined as fair market value of the timberland pledged as collateral. The Fund III Mortgages Payable to NWFCS contain a requirement to maintain a minimum interest coverage ratio of 1.5:1, minimum working capital of $500,000, and a loan-to-value ratio of less than 50%, with the denominator defined as fair market value. Both Timber Funds are in compliance with their respective debt covenants as of March 31, 2021.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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