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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs | 12 Months Ended
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Dec. 31, 2021
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 COSTSAt December 31, 2021, the principal amount of outstanding debt totaled $1.2 billion, of which $949.0 million was fixed rate debt and $206.0 million was variable rate debt. The principal amount of the Company’s outstanding debt totaled $1.2 billion at December 31, 2020, of which $980.8 million was fixed rate debt and $179.5 million was variable rate debt. At December 31, 2021, the Company had a $525.0 million unsecured credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, of which $425.0 million is a Revolving Line and $100.0 million is a Term Loan. The Revolving Line matures on August 29, 2025, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on February 26, 2027, and may not be extended. In general, loan availability under the New 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 Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of December 31, 2021, the applicable spread for borrowings is 135 basis points under the Revolving Line 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 Facility. Letters of credit may be issued under the revolving credit facility. On December 31, 2021, based on the value of the Company’s unencumbered properties, approximately $219.8 million was available under the Revolving Line, $106.0 million was outstanding and approximately $185,000 was committed for letters of credit. 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 Broadlands mortgage (approximately $3.7 million of the $29.6 million outstanding balance at December 31, 2021), (b) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $24.1 million outstanding balance at December 31, 2021), (c) a portion of The Waycroft mortgage (approximately $23.6 million of the $156.1 million outstanding balance at December 31, 2021), (d) the Ashbrook Marketplace mortgage (totaling $21.3 million at December 31, 2021), and (e) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands pad (totaling $28.9 million at December 31, 2021). All other notes payable are non-recourse. The guarantee on the Kentlands Square II mortgage loan was released on February 5, 2020. The guarantee on the Park Van Ness mortgage was released on October 1, 2021. 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. On January 5, 2021, the Company repaid in full the remaining principal balance of $6.1 million of the mortgage loan secured by Jamestown Place, which was scheduled to mature in February 2021. On June 11, 2021, the Company repaid in full the remaining principal balance of $5.0 million of the mortgage loan secured by Hunt Club Corners, which was scheduled to mature in August 2021. On November 19, 2021, the Company closed on a $145.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund Phase I of the Twinbrook Quarter development project. The loan matures in 2041, bears interest at a fixed rate of 3.83%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2026, and thereafter, monthly principal and interest payments based on a 25-year amortization schedule will be required. The carrying value of the properties collateralizing the mortgage notes payable totaled $1.1 billion and $1.2 billion, as of December 31, 2021 and 2020, 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, 2021. •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, 2021 and 2020, are guaranteed by members of the Saul Organization. As of December 31, 2021, 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
2022 | $ | 36,502 |  |  | $ | 31,033 |  |  | $ | 67,535 |
2023 | 9,225 |  |  | 31,498 |  |  | 40,723 |
2024 | 66,164 |  |  | 30,792 |  |  | 96,956 |
2025 | 126,363 |  | (a) | 27,874 |  |  | 154,237 |
2026 | 134,088 |  |  | 24,347 |  |  | 158,435 |
Thereafter | 545,276 |  |  | 91,866 |  |  | 637,142 |
Principal amount | $ | 917,618 |  |  | $ | 237,410 |  |  | 1,155,028 |
Unamortized deferred debt costs |  |  |  |  | 11,172 |
Net |  |  |  |  | $ | 1,143,856 |
(a) Includes $106.0 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 $11.2 million and $9.3 million, net of accumulated amortization of $7.7 million and $8.7 million at December 31, 2021 and 2020, 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,
| 2021 |  | 2020 |  | 2019
Interest incurred | $ | 50,552 |  |  | $ | 51,705 |  |  | $ | 52,044 |
Amortization of deferred debt costs | 1,710 |  |  | 1,570 |  |  | 1,518 |
Capitalized interest | (6,831) |  |  | (6,616) |  |  | (11,480) |
Interest expense | 45,431 |  |  | 46,659 |  |  | 42,082 |
Less: Interest income | 7 |  |  | 140 |  |  | 248 |
Interest expense, net and amortization of deferred debt costs | $ | 45,424 |  |  | $ | 46,519 |  |  | $ | 41,834 |
Deferred debt costs capitalized during the years ending December 31, 2021, 2020 and 2019 totaled $6.4 million, $1.2 million and $1.0 million, respectively.

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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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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