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Mortgage and Other Indebtedness | 9 Months Ended
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Sep. 30, 2013
Debt Disclosure [Abstract] |
Mortgage and Other Indebtedness | Mortgage and Other Indebtedness Mortgage and other indebtedness consisted of the following:
| September 30, 2013 |  | December 31, 2012
| Amount |  | Weighted- Average Interest Rate (1) |  | Amount |  | Weighted- Average Interest Rate (1)
Fixed-rate debt: |  |  |  |  |  |  |
Non-recourse loans on operating properties (2) | $ | 3,498,825 |  |  | 5.56% |  | $ | 3,776,245 |  |  | 5.42%
Financing method obligation (3) | 18,264 |  |  | 8.00% |  | 18,264 |  |  | 8.00%
Total fixed-rate debt | 3,517,089 |  |  | 5.57% |  | 3,794,509 |  |  | 5.43%
Variable-rate debt: |  |  |  |  |  |  |  |  |
Non-recourse term loans on operating properties | 134,119 |  |  | 3.16% |  | 123,875 |  |  | 3.36%
Recourse term loans on operating properties | 51,960 |  |  | 1.89% |  | 97,682 |  |  | 1.78%
Construction loans | 49,641 |  |  | 2.93% |  | 15,366 |  |  | 2.96%
Unsecured lines of credit | 664,908 |  |  | 1.58% |  | 475,626 |  |  | 2.07%
Secured line of credit (4) | — |  |  | —% |  | 10,625 |  |  | 2.46%
Unsecured term loans | 450,000 |  |  | 1.72% |  | 228,000 |  |  | 1.82%
Total variable-rate debt | 1,350,628 |  |  | 1.85% |  | 951,174 |  |  | 2.20%
Total | $ | 4,867,717 |  |  | 4.54% |  | $ | 4,745,683 |  |  | 4.79%
(1) | Weighted-average interest rate includes the effect of debt premiums (discounts), but excludes amortization of deferred financing costs.
(2) | The Company has four interest rate swaps on notional amounts totaling $110,875 as of September 30, 2013 and $113,885 as of December 31, 2012 related to four variable-rate loans on operating properties to effectively fix the interest rate on the respective loans. Therefore, these amounts are reflected in fixed-rate debt at September 30, 2013 and December 31, 2012.
(3) | This amount represents the noncontrolling partner's equity contribution related to Pearland Town Center that is accounted for as a financing due to certain terms of the CBL/T-C, LLC joint venture agreement.
(4) | The Company converted its secured line of credit to unsecured in February 2013.
Unsecured Lines of Credit The Company has three unsecured credit facilities that are used for retirement of secured loans, repayment of term loans, working capital, construction and acquisition purposes, as well as issuances of letters of credit. Wells Fargo Bank NA serves as the administrative agent for a syndicate of financial institutions for the Company's two unsecured $600,000 credit facilities ("Facility A" and "Facility B"). Facility A matures in November 2015 and has a one-year extension option for an outside maturity date of November 2016. Facility B matures in November 2016 and has a one-year extension option for an outside maturity date of November 2017. The extension options on both facilities are at the Company's election, subject to continued compliance with the terms of the facilities, and have a one-time extension fee of 0.20% of the commitment amount of each credit facility. In the first quarter of 2013, the Company amended and restated its $105,000 secured credit facility with First Tennessee Bank, NA. The facility was converted from secured to unsecured with a capacity of $100,000 and a maturity date of February 2016. Prior to May 14, 2013, borrowings under the three unsecured lines of credit bore interest at LIBOR plus a spread ranging from 155 to 210 basis points based on the Company’s leverage ratio. The Company also paid annual unused facility fees, on a quarterly basis, at rates of either 0.25% or 0.30% based on any unused commitment of each facility. In May 2013, the Company obtained an investment grade rating from Moody's Investors Service ("Moody's") and, effective May 14, 2013, made a one-time irrevocable election to use its credit rating to determine the interest rate on each facility. Under the credit rating election, each facility now bears interest at LIBOR plus a spread of 100 to 175 basis points. In July 2013, the Company received an Issuer Default Rating ("IDR") of BBB- with a stable outlook and a senior unsecured notes rating of BBB- from Fitch Ratings ("Fitch"). As of September 30, 2013, the Company's interest rate based on its credit ratings from Moody's and Fitch is LIBOR plus 140 basis points. Additionally, the Company pays an annual facility fee that ranges from 0.15% to 0.35% of the total capacity of each facility rather than the unused commitment fees as described above. As of September 30, 2013, the annual facility fee is 0.30%. The three unsecured lines of credit had a weighted-average interest rate of 1.58% at September 30, 2013. The following summarizes certain information about the Company's unsecured lines of credit as of September 30, 2013:
|  | Total Capacity |  | Total Outstanding |  | Maturity Date |  | Extended Maturity Date
Facility A |  | $ | 600,000 |  |  | $ | 509,525 |  | (1) | November 2015 |  | November 2016
First Tennessee |  | 100,000 |  |  | 31,000 |  |  | February 2016 |  | N/A
Facility B |  | 600,000 |  |  | 124,383 |  | (2) | November 2016 |  | November 2017
|  | $ | 1,300,000 |  |  | $ | 664,908 |  |  |  |  |
(1) There was an additional $475 outstanding on this facility as of September 30, 2013 for letters of credit. Up to $50,000 of the capacity on this facility can be used for letters of credit. (2) There was an additional $617 outstanding on this facility as of September 30, 2013 for letters of credit. Up to $50,000 of the capacity on this facility can be used for letters of credit. Unsecured Term Loans In July 2013, the Company closed on a five-year $400,000 unsecured term loan. Net proceeds from the term loan were used to reduce outstanding balances on the Company's lines of credit. The loan bears interest at a variable rate of LIBOR plus 150 basis points based on the Company's current credit ratings and has a maturity date of July 2018. At September 30, 2013, the outstanding borrowings of $400,000 had an interest rate of 1.68%. In the second quarter of 2013, the Company retired a $228,000 unsecured term loan at its maturity date with borrowings from the Company's credit facilities. In the first quarter of 2013, under the terms of the Company's amended and restated agreement with First Tennessee Bank, NA described above, the Company obtained a $50,000 unsecured term loan that bears interest at LIBOR plus 190 basis points and matures in February 2018. At September 30, 2013, the outstanding borrowings of $50,000 had a weighted-average interest rate of 2.08%. Covenants and Restrictions The agreements for the unsecured lines of credit and unsecured term loans contain, among other restrictions, certain financial covenants including the maintenance of certain financial coverage ratios, minimum net worth requirements, minimum unencumbered asset and interest ratios, maximum secured indebtedness and limitations on cash flow distributions. The Company believes that it was in compliance with all covenants and restrictions at September 30, 2013. The following presents the Company's compliance with key unsecured debt covenant compliance ratios as of September 30, 2013:
Ratio |  | Required |  | Actual
Debt to total asset value |  | < 60% |  | 52.7%
Ratio of unencumbered asset value to unsecured indebtedness |  | > 1.60x |  | 2.43x
Ratio of unencumbered NOI to unsecured interest expense |  | > 1.75x |  | 7.61x
Ratio of EBITDA to fixed charges (debt service) |  | > 1.50x |  | 2.15x
The agreements for the unsecured credit facilities and unsecured term loans described above contain default provisions customary for transactions of this nature (with applicable customary grace periods). Additionally, any default in the payment of any recourse indebtedness greater than or equal to $50,000 or any non-recourse indebtedness greater than $150,000 (for the Company's ownership share) of the Company, the Operating Partnership or any Subsidiary, as defined, will constitute an event of default under the agreements to the credit facilities. The credit facilities also restrict the Company's ability to enter into any transaction that could result in certain changes in its ownership or structure as described under the heading “Change of Control/Change in Management” in the agreements for the credit facilities. Prior to the Company obtaining an investment grade rating in May 2013, the obligations of the Company under the agreements were unconditionally guaranteed, jointly and severally, by any subsidiary of the Company to the extent such subsidiary was a material subsidiary and was not otherwise an excluded subsidiary, as defined in the agreements. Once the Company obtained an investment grade rating, guarantees by material subsidiaries of the Company were no longer required by the agreements. Several of the Company’s malls/open-air centers, associated centers and community centers, in addition to the corporate office building, are owned by special purpose entities that are included in the Company’s condensed consolidated financial statements. The sole business purpose of the special purpose entities is to own and operate these properties. The real estate and other assets owned by these special purpose entities are restricted under the loan agreements in that they are not available to settle other debts of the Company. However, so long as the loans are not under an event of default, as defined in the loan agreements, the cash flows from these properties, after payments of debt service, operating expenses and reserves, are available for distribution to the Company. Mortgages on Operating Properties In September 2013, the Company used borrowings from its lines of credit to retire a $10,200 recourse construction loan, which was secured by The Forum at Grandview in Madison, MS, at its September 2013 maturity date. In July 2013, the Company retired a $16,000 recourse construction loan, which was secured by Alamance Crossing West in Burlington, NC with borrowings from its credit facilities. The loan was scheduled to mature in December 2013. In the second quarter of 2013, the Company closed on a three-year $11,400 non-recourse loan secured by Statesboro Crossing in Statesboro, GA. The loan bears interest at LIBOR plus 180 basis points. The loan matures in June 2016 and has two one-year extension options, which are at the Company's election, for an outside maturity date of June 2018. Proceeds from the loan were used to pay down the Company's credit facilities. Also during the second quarter of 2013, the Company retired two loans with an aggregate principal balance of $160,150, including an $88,410 loan secured by Mid Rivers Mall in St. Peters, MO and a $71,740 loan secured by South County Center in St. Louis MO, with borrowings from its credit facilities. The Mid Rivers loan was scheduled to mature in May 2021 and bore interest at a fixed rate of 5.88%. The Company recorded an $8,936 loss on extinguishment of debt related to the Mid Rivers loan, which consisted of an $8,708 prepayment fee and $228 of unamortized debt issuance costs. In connection with the prepayment of the South County Center loan, which was scheduled to mature in October 2013, the Company recorded a loss on extinguishment of debt of $172 from the write-off of an unamortized discount. In the first quarter of 2013, the Company retired two loans with an aggregate balance of $77,099, including a $13,460 loan secured by Statesboro Crossing in Statesboro, GA and a $63,639 loan secured by Westmoreland Mall in Greensburg, PA, with borrowings from the Company's credit facilities. Both loans were scheduled to mature in the first quarter of 2013. The lender of the non-recourse mortgage loan secured by Columbia Place in Columbia, SC notified the Company in the first quarter of 2012 that the loan had been placed in default. Columbia Place generates insufficient income levels to cover the debt service on the mortgage, which had a balance of $27,265 at September 30, 2013 and a contractual maturity date of September 2013. The lender on the loan receives the net operating cash flows of the property each month in lieu of scheduled monthly mortgage payments. The servicer for the loan secured by Columbia Place is proceeding with foreclosure which the Company anticipates will occur by the first quarter of 2014. In August 2013, the lender of the non-recourse mortgage loan secured by Citadel Mall in Charleston, SC sent a formal notice of default and initiated foreclosure proceedings. A foreclosure sale is scheduled to occur in January 2014. Citadel Mall generates insufficient income levels to cover the debt service on the mortgage, which had a balance of $68,282 at September 30, 2013 and a contractual maturity date of April 2017. In the second quarter of 2013, the lender on the loan began receiving the net operating cash flows of the property each month in lieu of scheduled monthly mortgage payments. See Note 16 for an operating property loan obtained subsequent to September 30, 2013 which replaced an existing construction loan. Construction Loans In August 2013, Louisville Outlet Shoppes, LLC obtained a construction loan for the development of The Outlet Shoppes at Louisville that allows for borrowings up to $60,200 and bears interest at LIBOR plus 200 basis points. The loan matures in August 2016 and has two one-year extension options, which are at the joint venture's election, for an outside maturity date of August 2018. The Company has guaranteed 100% of the loan. There were no amounts outstanding under this construction loan at September 30, 2013. Subsequent to September 30, 2013, a construction loan was repaid. See Note 16 for additional information. Scheduled Principal Payments As of September 30, 2013, the scheduled principal amortization and balloon payments of the Company’s consolidated debt, excluding extensions available at the Company’s option, on all mortgage and other indebtedness, including construction loans and lines of credit, are as follows:
2013 | $ | 45,898 |
2014 | 219,148 |
2015 | 1,108,496 |
2016 | 943,779 |
2017 | 550,777 |
Thereafter | 1,988,573 |
| 4,856,671 |
Net unamortized premiums | 11,046 |
| $ | 4,867,717 |
Of the $45,898 of scheduled principal payments in 2013, $18,633 represents scheduled principal amortization and $27,265 relates to the principal balance of one operating property loan secured by Columbia Place with a maturity date of September 2013. The servicer for the loan secured by Columbia Place is proceeding with foreclosure which the Company anticipates will occur by the first quarter of 2014. The Company’s mortgage and other indebtedness had a weighted-average maturity of 4.0 years as of September 30, 2013 and 4.9 years as of December 31, 2012. Interest Rate Hedge Instruments The Company records its derivative instruments in its condensed consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the derivative has been designated as a hedge and, if so, whether the hedge has met the criteria necessary to apply hedge accounting. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Such derivatives are used to hedge the variable cash flows associated with variable-rate debt. As of September 30, 2013, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivative |  | Number of Instruments |  | Notional Amount Outstanding
Interest Rate Cap |  | 1 |  | $ | 122,750 |
Interest Rate Swaps |  | 4 |  | $ | 110,875 |
Instrument Type |  | Location in Condensed Consolidated Balance Sheet |  | Notional Amount Outstanding |  | Designated Benchmark Interest Rate |  | Strike Rate |  | Fair Value at 9/30/2013 |  | Fair Value at 12/31/12 |  | Maturity Date
Cap |  | Intangible lease assets and other assets |  | $122,750 (amortizing to $122,375) |  | 3-month LIBOR |  | 5.000% |  | $ | — |  |  | $ | — |  |  | Jan 2014
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $53,599 (amortizing to $48,337) |  | 1-month LIBOR |  | 2.149% |  | $ | (2,111 | ) |  | $ | (2,775 | ) |  | Apr 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $33,559 (amortizing to $30,276) |  | 1-month LIBOR |  | 2.187% |  | (1,351 | ) |  | (1,776 | ) |  | Apr 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $12,546 (amortizing to $11,313) |  | 1-month LIBOR |  | 2.142% |  | (492 | ) |  | (647 | ) |  | Apr 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $11,171 (amortizing to $10,083) |  | 1-month LIBOR |  | 2.236% |  | (463 | ) |  | (607 | ) |  | Apr 2016
|  |  |  |  |  |  |  |  |  | $ | (4,417 | ) |  | $ | (5,805 | ) |  |
|  | Gain (Loss) Recognized in OCI/L (Effective Portion) |  | Location of Losses Reclassified from AOCI into Earnings (Effective Portion) |  | Loss Recognized in Earnings (Effective Portion) |  | Location of Gain Recognized in Earnings (Ineffective Portion) |  | Gain Recognized in Earnings (Ineffective Portion)
Hedging Instrument |  | Three Months Ended September 30, |  |  | Three Months Ended September 30, |  |  | Three Months Ended September 30,
| 2013 |  | 2012 |  |  | 2013 |  | 2012 |  |  | 2013 |  | 2012
Interest rate contracts |  | $ | 117 |  |  | $ | (234 | ) |  | Interest Expense |  | $ | (568 | ) |  | $ | (567 | ) |  | Interest Expense |  | $ | — |  |  | $ | — |
|  | Gain (Loss) Recognized in OCI/L (Effective Portion) |  | Location of Losses Reclassified from AOCI into Earnings(Effective Portion) |  | Loss Recognized in Earnings (Effective Portion) |  | Location of Gain Recognized in Earnings (Ineffective Portion) |  | Gain Recognized in Earnings (Ineffective Portion)
Hedging Instrument |  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30,
| 2013 |  | 2012 |  |  | 2013 |  | 2012 |  |  | 2013 |  | 2012
Interest rate contracts |  | $ | 1,398 |  |  | $ | (715 | ) |  | Interest Expense |  | $ | (1,687 | ) |  | $ | (1,696 | ) |  | Interest Expense |  | $ | — |  |  | $ | — |
As of September 30, 2013, the Company expects to reclassify approximately $2,149 of losses currently reported in AOCI to interest expense within the next twelve months due to amortization of its outstanding interest rate contracts. Fluctuations in fair values of these derivatives between September 30, 2013 and the respective dates of termination will vary the projected reclassification amount.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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