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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs MORTGAGE NOTES PAYABLE, REVOLVING CREDIT FACILITY, INTEREST EXPENSE AND AMORTIZATION OF DEFERRED DEBT COSTS
At December 31, 2020, the principal amount of outstanding debt totaled $1.2 billion, of which $980.8 million was fixed rate debt and $179.5 million was variable rate debt. The principal amount of the Company’s outstanding debt totaled $1.1 billion at December 31, 2019, of which $938.4 million was fixed rate debt and $162.5 million was variable rate debt.
At December 31, 2020, the Company had a $400.0 million unsecured credit facility, which can be used for working capital, property acquisitions or development projects, 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 the Company’s satisfaction of certain conditions. The term loan matures on January 26, 2023, and may not be extended. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the credit facility. Letters of credit may be issued under the revolving credit facility. On December 31, 2020, based on the value of the Company's unencumbered properties, approximately $220.3 million was available under the revolving credit facility, $104.5 million was outstanding and approximately $185,000 was committed for letters of credit. Interest at a rate equal to the sum of one-month LIBOR and a margin that is based on the Company’s
leverage ratio and which can range from 135 basis points to 195 basis points under the revolving facility and from 130 basis points to 190 basis points under the term loan. As of December 31, 2020, the margin was 140 basis points under the revolving facility and 135 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 credit facility. The Operating Partnership is the guarantor of (a) a portion of the Park Van Ness mortgage (approximately $3.3 million of the $66.4 million outstanding balance at December 31, 2020, which guarantee was reduced to (i) $3.3 million on October 1, 2020 and (ii) will be reduced to zero on October 1, 2021), (b) a portion of the Broadlands mortgage  (approximately  $3.8 million of the $30.5 million outstanding balance at December 31, 2020), (c) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $25.2 million outstanding balance at December 31, 2020), (d) a portion of The Waycroft mortgage (approximately $23.6 million of the $146.1 million outstanding balance at December 31, 2020), (e) the Ashbrook Marketplace mortgage (totaling $21.9 million at December 31, 2020), and (f) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands pad (totaling $29.7 million at December 31, 2020). All other notes payable are non-recourse. The guarantee on the Kentlands Square II mortgage loan was released on February 5, 2020.
On January 4, 2019, the Company repaid in full the remaining principal balance of $12.7 million of the mortgage loan secured by Countryside Marketplace, which was scheduled to mature in July 2019.
On January 10, 2019, the Company closed on a 15-year, non-recourse $22.1 million mortgage loan secured by Olde Forte Village. The loan matures in 2034, bears interest at a fixed-rate of 4.65%, requires monthly principal and interest payments of $124,700 based on a 25-year amortization schedule and requires a final payment of $12.1 million. Proceeds were partially used to repay in full the existing mortgage secured by Olde Forte Village, which was scheduled to mature in May 2019.
On June 3, 2019, the Company repaid in full the remaining principal balance of $12.4 million of the mortgage loan secured by Briggs Chaney Marketplace, which was scheduled to mature in September 2019.
On November 12, 2019, the Company closed on a 15-year, non-recourse $28.5 million mortgage loan secured by Shops at Monocacy. The loan matures in 2034, bears interest at a fixed-rate of 4.14%, requires monthly principal and interest payments of $152,600 based on a 25-year amortization schedule and requires a final payment of $15.1 million. Proceeds were partially used to repay in full the existing mortgage secured by Shops at Monocacy, which was scheduled to mature in January 2020.
On November 21, 2019, the Company repaid in full the remaining principal balance of $35.6 million of the mortgage loan secured by Thruway, which was scheduled to mature in July 2020. The Company’s corresponding swap agreement was terminated on the same day.
On February 10, 2020, the Company repaid in full the remaining principal balance of $9.2 million of the mortgage loan secured by Boca Valley Plaza, which was scheduled to mature on May 10, 2020.
On March 3, 2020, the Company repaid in full the remaining principal balance of $7.1 million of the mortgage loan secured by Palm Springs Center, which was scheduled to mature on June 1, 2020.
On July 14, 2020, the Company closed on a 15-year, $22.1 million mortgage loan secured by Ashbrook Marketplace. The loan matures in 2035, bears interest at a fixed rate of 3.80%, requires monthly principal and interest payments of $114,226 based on a 25-year amortization schedule and requires a final payment of $11.5 million at maturity. The proceeds from the loan were used to pay down the revolving credit facility.
On July 24, 2020, the Company closed on a 15-year, $30.0 million mortgage loan secured by Kentlands Place, Kentlands Square I and Kentlands Pad. The loan matures in 2035, bears interest at a fixed rate of 3.43%, requires monthly principal and interest payments of $149,064 based on a 25-year amortization schedule and requires a final payment of $15.3 million at maturity. The proceeds from the loan were used to pay down the revolving credit facility.
The carrying value of the properties collateralizing the mortgage notes payable totaled $1.2 billion and $1.1 billion, as of December 31, 2020 and 2019, respectively. The Company’s credit facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. The Company was in compliance as of December 31, 2020.
•limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);
•limit the amount of debt so that interest coverage will exceed 2.0 x on a trailing four-quarter basis (interest expense coverage); and
•limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).
Mortgage notes payable totaling $41.0 million at each of December 31, 2020 and 2019, are guaranteed by members of the Saul Organization.
As of December 31, 2020, the scheduled maturities of all debt including scheduled principal amortization for years ended December 31 are as follows:
(in thousands)Balloon
Payments		Scheduled
Principal
Amortization		Total
2021$11,012 $30,355 $41,367 
2022141,002 (a)31,017 172,019 
202384,225 31,481 115,706 
202466,164 30,856 97,020 
202520,363 27,860 48,223 
Thereafter569,330 116,586 685,916 
Principal amount$892,096 $268,155 1,160,251 
Unamortized deferred debt costs9,337 
Net$1,150,914 
            (a) Includes $104.5 million outstanding under the revolving facility.
Deferred Debt Costs
Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the revolving line of credit. 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 $9.3 million and $9.7 million, net of accumulated amortization of $8.7 million and $7.5 million at December 31, 2020 and 2019, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

The components of interest expense are set forth below.
(in thousands)Year ended December 31,
 202020192018
Interest incurred$51,705 $52,044 $49,652 
Amortization of deferred debt costs1,570 1,518 1,610 
Capitalized interest(6,616)(11,480)(6,222)
Interest expense46,659 42,082 45,040 
Less: Interest income140 248 272 
Interest expense, net and amortization of deferred debt costs$46,519 $41,834 $44,768 
Deferred debt costs capitalized during the years ending December 31, 2020, 2019 and 2018 totaled $1.2 million, $1.0 million and $3.2 million, respectively.