Notes Payable and Other Debt

12 Months Ended

Dec. 31, 2023

As of December 31, 2023 and 2022, Notes payable and other debt consisted of the following (in millions):


				Principal Outstanding
Debt	Interest Rate (%)	Maturity Date		December 31, 2023		December 31, 2022
Secured:
Laulani Village	3.93%	2024		$	57.8	$	59.0
Pearl Highlands	4.15%	2024		75.1		77.3
Photovoltaic Financing	(1)	(1)		4.1		2.6
Manoa Marketplace	(2)	2029		52.7		54.5
Subtotal				$	189.7	$	193.4
Unsecured:
Series A Note	5.53%	2024		7.1		14.2
Series J Note	4.66%	2025		10.0		10.0
Series B Note	5.55%	2026		27.0		36.0
Series C Note	5.56%	2026		9.0		11.0
Series F Note	4.35%	2026		9.7		15.2
Series H Note	4.04%	2026		50.0		50.0
Series K Note	4.81%	2027		34.5		34.5
Series G Note	3.88%	2027		22.1		28.1
Series L Note	4.89%	2028		18.0		18.0
Series I Note	4.16%	2028		25.0		25.0
Term Loan 5	4.30%	2029		25.0		25.0
Subtotal				$	237.4	$	267.0
Revolving Credit Facilities:
A&B Revolver	(3)	2025	(4)	37.0		12.0
Subtotal				$	37.0	$	12.0
Total debt (contractual)				$	464.1	$	472.4

Unamortized debt issuance costs				(0.1)		(0.2)
Total debt (carrying value)				$	464.0	$	472.2

(1) Financing leases have a weighted average discount rate of 4.75% and maturity dates ranging from 2027 to 2028
(2) Loan has a stated interest rate of SOFR plus 1.35%. Prior to August 1, 2023, loan had a stated interest rate of LIBOR plus 1.35%. Loan is swapped through maturity to a 3.14% fixed rate.
(3) Loan has a stated interest rate of SOFR plus 1.05% based on pricing grid, plus a SOFR adjustment of 0.10%. Prior to April 28, 2023, loan had a stated interest rate of LIBOR plus 1.05% based on a pricing grid. $50.0 million was swapped through June 2022 to a 2.40% fixed rate.
(4) A&B Revolver has two six-month optional term extensions.

The Company's notes payable and other debt is categorized between debt instruments secured by real estate improved properties or other assets ("Secured Debt"), unsecured notes payable and other term loans ("Unsecured Debt") and borrowings under revolving credit facilities ("Revolving Credit Facilities") which includes the existing revolving credit facility used for general Company purposes ("A&B Revolver").

Secured Debt

Laulani Village: In connection with asset acquisitions of commercial real estate improved properties made in the year ended December 31, 2018, the Company assumed a $62.0 million mortgage secured by Laulani Village that matures on May 1, 2024, and bears interest at 3.93%. The note required monthly interest only payments of approximately $0.2 million until May 2020. Thereafter, the note requires monthly principal and interest payments of approximately $0.3 million and a final principal payment of approximately $57.5 million due on May 1, 2024.

Pearl Highlands: In connection with the acquisition of Pearl Highlands Center in September 2013, the Company assumed a $59.3 million mortgage loan secured by the property. In December 2014, the loan was refinanced to increase the amount of the loan to $92.0 million (bearing interest at 4.15%). The refinanced loan requires monthly principal and interest payments of approximately $0.4 million and a final principal payment of approximately $73.0 million due on December 8, 2024.

Manoa Marketplace: In 2016, the Company, through wholly-owned subsidiaries, entered into a $60.0 million mortgage loan agreement secured by Manoa Marketplace with First Hawaiian Bank ("FHB"). The loan bears interest at a base rate, originally LIBOR, plus 1.35% and requires principal and interest payments over the term with a final principal payment of $41.7 million due on August 1, 2029. In 2023, the Company entered into a note modification agreement with FHB which transitioned the interest rate on the Manoa Marketplace mortgage loan from LIBOR to a benchmark based on SOFR effective August 1, 2023.

All other terms of the agreement remain substantially unchanged. The Company had previously entered into an interest rate swap agreement with a notional amount equal to the principal amount on the debt to fix the LIBOR-based variable interest rate on the related periodic interest payments at an effective rate of 3.14% (refer to Note 9 – Derivative Instruments). The interest rate swap agreement was also modified in 2023 to transition the variable interest rate from LIBOR to a benchmark based on SOFR.

Assets Pledged as Collateral: The gross book value of the commercial real estate assets pledged as collateral described above at December 31, 2023, was $365.2 million.

Unsecured Debt

Prudential Series Notes: In December 2015, the Company entered into an agreement (the "Prudential Agreement") with Prudential Investment Management, Inc. and its affiliates (collectively, "Prudential") for an unsecured note purchase and private shelf facility that enabled the Company to issue notes in an aggregate amount up to $450.0 million, less the sum of all principal amounts then outstanding on any notes issued by the Company or any of its subsidiaries to Prudential and the amounts of any notes that are committed under the Prudential Agreement. The Prudential Agreement (which amended and renewed a then-existing agreement) had an issuance period that ended in December 2018 and contained certain restrictive covenants for the notes issued under the Prudential Agreement. On August 31, 2021, the Company entered into an agreement with Prudential to amend certain covenants related to the Prudential Private Shelf Facility. All other terms of this agreement remain substantially unchanged. Borrowings under the uncommitted shelf facility bear interest at rates that were determined at the time of borrowing.

Term Loan 5: In November 2017, the Company entered into a rate lock commitment to draw $25.0 million under its Note Purchase and Private Shelf Agreement with AIG Asset Management (U.S.), LLC. Under the commitment, the Company drew $25.0 million in December 2017. The note bears interest at 4.30% and matures on December 20, 2029. Interest only is paid semi-annually and the principal balance is due at maturity. On August 31, 2021, the Company entered into an agreement with AIG Asset Management to amend certain covenants related to the AIG Private Shelf Facility. All other terms of this agreement remain substantially unchanged.

Revolving credit facility

A&B Revolver: In August 2021, the Company entered into a Third Amended and Restated Credit Agreement ("2021 A&B Revolver") with Bank of America N.A., as administrative agent, First Hawaiian Bank, KeyBank National Association, Wells Fargo Bank, National Association, and other lenders party thereto, which amended and restated the Company's existing $450.0 million committed under the Second Amended and Restated Credit Agreement ("2017 A&B Revolver") with Bank of America N.A., as administrative agent, First Hawaiian Bank, and other lenders party thereto. The 2021 A&B Revolver increased the total revolving commitments to $500.0 million, extended the term of the facility from September 15, 2022, to August 29, 2025, and includes two six-month extension options. In addition, the 2021 A&B Revolver amended certain covenants (see below) and reduced the interest rates and fees charged under the financials-based pricing grid of the 2017 A&B Revolver. On April 28, 2023, the Company entered into the First Amendment to the Third Amended and Restated Credit Agreement, which transitioned the interest rate from LIBOR to a benchmark based on SOFR, plus a SOFR adjustment of 0.10%. All other terms of the agreement remain substantially unchanged.

At December 31, 2023, the Company had $37.0 million of revolving credit borrowings outstanding with no letters of credit issued against the facility, and $463.0 million remained available.

Covenants under 2021 A&B Revolver, Prudential Series Notes, and Term Loan 5 (subsequent to amendments)

The principal financial covenants under the 2021 A&B Revolver, the Prudential Amendment, and the AIG Amendment are as follows:

•Maximum ratio of secured debt to total adjusted asset value of 0.40:1.00.

•Minimum shareholders' equity amount of $865.6 million plus 75% percent of the net proceeds received from equity issuances after June 30, 2021.

•Minimum unencumbered interest coverage ratio of 1.75:1.00.

Debt principal payments

At December 31, 2023, debt principal payments and maturities during the next five years and thereafter and the corresponding amount of unamortized deferred financing costs or debt discounts or premiums were as follows (in millions):


	Scheduled Principal Payments
	2024		2025		2026		2027		2028		Thereafter		Total Principal		(Unamort Debt Issue Cost)/ (Discount) Premium		Total
Secured debt	$	135.0	$	2.2	$	2.2	$	4.0	$	3.3	$	43.0	$	189.7	$	—	$	189.7
Unsecured debt	27.0		38.3		67.0		37.1		43.0		25.0		237.4		(0.1)		237.3
Revolving credit facilities	—		37.0		—		—		—		—		37.0		—		37.0
Total Notes payable and other debt	$	162.0	$	77.5	$	69.2	$	41.1	$	46.3	$	68.0	$	464.1	$	(0.1)	$	464.0