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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs | 9 Months Ended
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Sep. 30, 2018
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 The principal amount of the Company’s outstanding debt totaled approximately $1.0 billion at September 30, 2018, of which approximately $870.9 million was fixed-rate debt and approximately $152.0 million was variable rate debt, including $77.0 million outstanding under an unsecured revolving credit facility and $75.0 million outstanding under a term loan credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $965.6 million as of September 30, 2018. On January 26, 2018, the Company replaced its credit facility. The new credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, totals $400.0 million, of which $325.0 million is a revolving credit facility and $75.0 million is a term loan. The revolving credit facility matures on January 26, 2022, and may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The term loan matures on January 26, 2023, and may not be extended. In general, loan availability under the new credit facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the revolving credit facility, and 130 basis points to 190 basis points under the term loan, each as determined by certain leverage tests. As of September 30, 2018, 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 new credit facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2018, based on the value of the Company’s unencumbered properties, approximately $161.1 million was available under the revolving credit facility, $77.0 million was outstanding and approximately $185,000 was committed for letters of credit. On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million at maturity. On August 14, 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund the Glebe Road development project. The loan, which had an outstanding balance of $2.9 million at September 30, 2018, matures in 2035, bears interest at a fixed rate of 4.67%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2021, and thereafter, monthly principal and interest payments of $887,900 based on a 25-year amortization schedule will be required. Effective September 1, 2017, the Company's construction-to-permanent loan secured by and used to partially finance the construction of Park Van Ness, converted to permanent financing. The loan matures in 2032, bears interest at a fixed rate of 4.88%, requires monthly principal and interest payments of $413,460 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity. On November 20, 2017, the Company closed on a 15-year, non-recourse $60.0 million mortgage loan secured by Washington Square. The loan matures in 2032, bears interest at a fixed rate of 3.75%, requires monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and requires a final payment of $31.1 million. Proceeds were used to repay the remaining balance of $28.1 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility. 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 $70.1 million outstanding balance at September 30, 2018, 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), and (b) a portion of the Kentlands Square II mortgage loan (approximately $9.2 million of the $35.6 million outstanding at September 30, 2018). All other notes payable are non-recourse. At December 31, 2017, the principal amount of the Company’s outstanding debt totaled approximately $965.5 million, of which $890.4 million was fixed rate debt and $75.1 million was variable rate debt, including $61.0 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.0 billion as of December 31, 2017. At September 30, 2018, 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, 2018 | $ | — |  |  | $ | 7,688 |  |  | $ | 7,688 |
2019 | 60,794 |  |  | 29,298 |  |  | 90,092 |
2020 | 61,163 |  |  | 26,772 |  |  | 87,935 |
2021 | 11,012 |  |  | 26,486 |  |  | 37,498 |
2022 | 113,502 |  | (a) | 26,990 |  |  | 140,492 |
2023 | 84,225 |  |  | 27,290 |  |  | 111,515 |
Thereafter | 430,259 |  |  | 117,422 |  |  | 547,681 |
Principal amount | $ | 760,955 |  |  | $ | 261,946 |  |  | 1,022,901 |
Unamortized deferred debt costs |  |  |  |  | 9,989 |
Net |  |  |  |  | $ | 1,012,912 |
(a) Includes $77.0 million outstanding under the revolving credit facility. Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2018 and 2017, were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2018 |  | 2017 |  | 2018 |  | 2017
Interest incurred | $ | 12,361 |  |  | $ | 12,370 |  |  | $ | 36,863 |  |  | $ | 37,037 |
Amortization of deferred debt costs | 377 |  |  | 351 |  |  | 1,224 |  |  | 1,043 |
Capitalized interest | (1,716 | ) |  | (900 | ) |  | (4,301 | ) |  | (2,495 | )
| $ | 11,022 |  |  | $ | 11,821 |  |  | $ | 33,786 |  |  | $ | 35,585 |

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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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