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LOANS AND MORTGAGES PAYABLE AND OTHER LONG-TERM INDEBTEDNESS
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
LOANS AND MORTGAGES PAYABLE AND OTHER LONG-TERM INDEBTEDNESS

NOTE 6 – LOANS AND MORTGAGES PAYABLE AND OTHER LONG-TERM INDEBTEDNESS

 

Loans Payable

 

The following is a summary of our loans payable as of September 30, 2024 and December 31, 2023 (in thousands):

   

   9/30/2024   12/31/2023 
   Amount   Rate   Amount   Rate 
                    
Margin Loan  (1)  $0    N/A   $0    N/A 
Unsecured revolving credit facility  (2)   0    N/A    70,000    7.27%
Floorplan inventory financing  (3)   3,123    8.97%   0    N/A 
FirstBank rental home loan  (4)   24,197    6.15%   24,683    6.15%
FirstBank rental home line of credit  (5)   0    N/A    0    N/A 
Triad rental home loan  (6)   0    N/A    0    N/A 
OceanFirst notes receivable financing  (7)   0    N/A    0    N/A 
Total Loans Payable      27,320    6.47%   94,683    6.98%
Unamortized debt issuance costs      (1,352)        (1,204)     
Loans Payable, net of unamortized                       
debt issuance costs     $25,968    6.81%  $93,479    7.07%

 

  (1) Collateralized by the Company’s securities portfolio and is due on demand. The Company must maintain a coverage ratio of approximately 2 times.
  (2) Represents an unsecured revolving credit facility syndicated with three banks, BMO Capital Markets Corp., JPMorgan Chase Bank, N.A, and Wells Fargo, N.A. Total available borrowings under this facility is $260 million.
  (3) Represents revolving credit agreements totaling $108.5 million with 21st Mortgage Corporation (“21st Mortgage”), Customers Bank, Northpoint Commercial Finance and Triad Financial Services (“Triad”) to finance inventory purchases. Interest rates on these agreements range from prime minus 0.75% to SOFR plus 4%. Subsequent to quarter end, the Company paid down this balance.
  (4) Represents a term loan secured by rental homes and rental home leases, with a fixed interest rate of 6.15% and a maturity of date of May 10, 2028.
  (5) Represents a $25 million revolving line of credit secured by rental homes and their leases with a 5-year term and a variable interest rate of prime.
  (6) Represents a $30 million revolving line of credit secured by rental homes and rental home leases, with an interest rate of prime plus 0.25%, with a minimum of 5%.
  (7) Represents a revolving line of credit secured by eligible notes receivable, with an interest rate of prime with a floor of 4.75%.

 

On April 2, 2024, the Company expanded the borrowing capacity on its unsecured revolving credit facility from $180 million in available borrowings to $260 million in available borrowings. The Facility is syndicated with three banks, BMO Capital Markets Corp., JPMorgan Chase Bank, N.A, and Wells Fargo, N.A. as joint arrangers and joint book runners, with Bank of Montreal as administrative agent. Interest is based on the Company’s overall leverage ratio and is equal to the Secured Overnight Financing Rate (“SOFR”) plus 1.5% to 2.20%, or BMO’s prime lending rate plus 0.50% to 1.20%. The maturity date is November 7, 2026.

 

 

Series A Bonds

 

On February 6, 2022, the Company issued $102.7 million of its new 4.72% Series A Bonds due 2027, or the 2027 Bonds, in an offering to investors in Israel. The Company received $98.7 million, net of offering expenses. The 2027 Bonds are unsecured obligations of the Company denominated in Israeli shekels (NIS) and were issued pursuant to a Deed of Trust dated January 31, 2022 between the Company and Reznik Paz Nevo Trusts Ltd., an Israeli trust company, as trustee. The 2027 Bonds pay interest at a rate of 4.72% per year. Interest on the 2027 Bonds is payable semi-annually on August 31, 2022, and on February 28 and August 31 of the years 2023-2026 (inclusive) and on the final maturity date of February 28, 2027. The principal and interest will be linked to the U.S. Dollar. In the event of a future downgrade by two or more notches in the rating of the 2027 Bonds or a failure by the Company to comply with certain covenants in the Deed of Trust, the interest rate on the 2027 Bonds will be subject to increase. However, any such increases, in the aggregate, would not exceed 1.25% per annum. As of September 30, 2024, the Company is in compliance with these covenants.

 

Under the Deed of Trust, the Company has the right to redeem the 2027 Bonds, in whole or in part, at any time on or after 60 days from February 9, 2022, the date on which the 2027 Bonds were listed for trading on the Tel Aviv Stock Exchange (the “TASE”). Any such voluntary early redemption by the Company will require payment of the applicable early redemption amount calculated in accordance with the Deed of Trust. The Company does not intend to redeem the 2027 Bonds. Upon the occurrence of an event of default or certain other events, including a delisting of the 2027 Bonds by the TASE, the Company may be required to effect an early repayment or redemption of all or a portion of the 2027 Bonds at their par value plus accrued and unpaid interest. The Deed of Trust permits the Company, subject to certain conditions, to issue additional 2027 Bonds without obtaining approval of the holders of the 2027 Bonds.

 

The 2027 Bonds are general unsecured obligations of the Company and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness. The Deed of Trust includes certain customary covenants, including financial covenants requiring the Company to maintain certain ratios of debt to net operating income, to shareholders’ equity and to earnings, and customary events of default. The 2027 Bonds were offered solely to investors outside the United States and were not offered to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the Securities Act of 1933).

 

Mortgages Payable

 

The following is a summary of our mortgages payable as of September 30, 2024 and December 31, 2023 (in thousands):

  

   9/30/2024   12/31/2023 
   Amount   Rate   Amount   Rate 
                 
Fixed rate mortgages  $492,248    4.17%  $501,135    4.17%
Unamortized debt issuance costs   (3,963)        (4,652)     
Mortgages Payable, net of unamortized debt issuance costs  $488,285    4.21%  $496,483    4.21%

 

As of September 30, 2024 and December 31, 2023, the weighted average loan maturity of mortgages payable was 4.6 years and 5.3 years, respectively.