XML 33 R14.htm IDEA: XBRL DOCUMENT
v3.4.0.3

Mortgage and Other Indebtedness | 3 Months Ended
--- | ---
Mar. 31, 2016
Debt Disclosure [Abstract] |
Mortgage and Other Indebtedness | Mortgage and Other Indebtedness Debt of the Company CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries, that it has a direct or indirect ownership interest in, is the borrower on all of the Company's debt. CBL is a limited guarantor of the 5.25% and 4.60% senior unsecured notes, issued by the Operating Partnership in November 2013 and October 2014, respectively, for losses suffered solely by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates. The Company also provides a similar limited guarantee of the Operating Partnership's obligations with respect to its unsecured credit facilities and three unsecured term loans as of March 31, 2016. Debt of the Operating Partnership Mortgage and other indebtedness consisted of the following:
| March 31, 2016 |  | December 31, 2015
| Amount |  | Weighted- Average Interest Rate (1) |  | Amount |  | Weighted- Average Interest Rate (1)
Fixed-rate debt: |  |  |  |  |  |  |
Non-recourse loans on operating properties (2) | $ | 2,720,015 |  |  | 5.68% |  | $ | 2,736,538 |  |  | 5.68%
Senior unsecured notes due 2023 (3) | 446,249 |  |  | 5.25% |  | 446,151 |  |  | 5.25%
Senior unsecured notes due 2024 (4) | 299,934 |  |  | 4.60% |  | 299,933 |  |  | 4.60%
Other | 61 |  |  | 3.50% |  | 2,686 |  |  | 3.50%
Total fixed-rate debt | 3,466,259 |  |  | 5.53% |  | 3,485,308 |  |  | 5.53%
Variable-rate debt: |  |  |  |  |  |  |  |  |
Non-recourse term loans on operating properties | 19,355 |  |  | 2.87% |  | 16,840 |  |  | 2.49%
Recourse term loans on operating properties | 25,974 |  |  | 3.03% |  | 25,635 |  |  | 2.97%
Unsecured lines of credit | 387,186 |  |  | 1.63% |  | 398,904 |  |  | 1.54%
Unsecured term loans | 800,000 |  |  | 1.87% |  | 800,000 |  |  | 1.82%
Total variable-rate debt | 1,232,515 |  |  | 1.84% |  | 1,241,379 |  |  | 1.76%
Total fixed-rate and variable-rate debt | 4,698,774 |  |  | 4.56% |  | 4,726,687 |  |  | 4.54%
Unamortized deferred financing costs | (15,287 | ) |  |  |  | (16,059 | ) |  |
Total mortgage and other indebtedness | $ | 4,683,487 |  |  |  |  | $ | 4,710,628 |  |  |
(1) | Weighted-average interest rate includes the effect of debt premiums and discounts, but excludes amortization of deferred financing costs.
(2) | The Operating Partnership had four interest rate swaps on notional amounts totaling $100,009 as of March 31, 2016 and $101,151 as of December 31, 2015 related to four variable-rate loans on operating properties to effectively fix the interest rate on the respective loans. Therefore, these amounts were reflected in fixed-rate debt at March 31, 2016 and December 31, 2015. The swaps matured April 1, 2016.
(3) | The balance is net of an unamortized discount of $3,751 and $3,849 as of March 31, 2016 and December 31, 2015, respectively.
(4) | The balance is net of an unamortized discount of $66 and $67 as of March 31, 2016 and December 31, 2015, respectively.
Senior Unsecured Notes In the fourth quarter of 2014, the Operating Partnership issued $300,000 of senior unsecured notes, which bear interest at 4.60% payable semiannually beginning April 15, 2015 and mature on October 15, 2024 (the “2024 Notes”). In the fourth quarter of 2013, the Operating Partnership issued $450,000 of senior unsecured notes, which bear interest at 5.25% payable semiannually beginning June 1, 2014 and mature on December 1, 2023 (the “2023 Notes”). The respective interest rate on each of the 2024 Notes and the 2023 Notes (collectively, the “Notes”) will be subject to an increase ranging from 0.25% to 1.00% from time to time if, on or after January 1, 2016 and prior to January 1, 2020, the ratio of secured debt to total assets of the Company, as defined, is greater than 40% but less than 45%. The Notes are redeemable at the Operating Partnership's election, in whole or in part from time to time, on not less than 30 days’ notice to the holders of the Notes to be redeemed. The 2024 Notes may be redeemed prior to July 15, 2024 for cash, at a redemption price equal to the greater of (1) 100% of the aggregate principal amount of the 2024 Notes to be redeemed or (2) an amount equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2024 Notes to be redeemed, discounted to the redemption date on a semi-annual basis at the treasury rate, as defined, plus 0.35%, plus accrued and unpaid interest. On or after July 15, 2024, the 2024 Notes are redeemable for cash at a redemption price equal to 100% of the aggregate principal amount of the 2024 Notes to be redeemed plus accrued and unpaid interest. The 2023 Notes may be redeemed prior to September 1, 2023 for cash, at a redemption price equal to the greater of (1) 100% of the aggregate principal amount of the 2023 Notes to be redeemed or (2) an amount equal to the sum of the present values of the remaining scheduled payments of principal and interest on the 2023 Notes to be redeemed, discounted to the redemption date on a semi-annual basis at the treasury rate, as defined, plus 0.40%, plus accrued and unpaid interest. On or after September 1, 2023, the 2023 Notes are redeemable for cash at a redemption price equal to 100% of the aggregate principal amount of the 2023 Notes to be redeemed plus accrued and unpaid interest. 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. Each facility bears interest at LIBOR plus a spread of 0.875% to 1.55% based on the Company's credit ratings. As of March 31, 2016, the Company's interest rate based on its credit ratings of Baa3 from Moody's Investors Service ("Moody's") and BBB- from Standard & Poor's ("S&P") and Fitch Ratings ("Fitch") is LIBOR plus 120 basis points. Additionally, the Company pays an annual facility fee that ranges from 0.125% to 0.3% of the total capacity of each facility based on the Company's credit ratings. As of March 31, 2016, the annual facility fee was 0.25%. The three unsecured lines of credit had a weighted-average interest rate of 1.63% at March 31, 2016. The following summarizes certain information about the Company's unsecured lines of credit as of March 31, 2016:
|  | Total Capacity |  | Total Outstanding |  | Maturity Date |  | Extended Maturity Date |
Wells Fargo - Facility A |  | $ | 500,000 |  |  | $ | — |  | (1) | October 2019 |  | October 2020 | (2)
First Tennessee |  | 100,000 |  |  | 27,800 |  | (3) | October 2019 |  | October 2020 | (4)
Wells Fargo - Facility B |  | 500,000 |  |  | 359,386 |  | (5) | October 2020 |  |  |
|  | $ | 1,100,000 |  |  | $ | 387,186 |  |  |  |  |  |
(1) | There was an additional $350 outstanding on this facility as of March 31, 2016 for letters of credit. Up to $30,000 of the capacity on this facility can be used for letters of credit.
(2) | The extension options are at the Company's election, subject to continued compliance with the terms of the facilities, and has a one-time extension fee of 0.15% of the commitment amount of each credit facility.
(3) | There was an additional $113 outstanding on this facility as of March 31, 2016 for letters of credit. Up to $20,000 of the capacity on this facility can be used for letters of credit.
(4) | The extension option on the facility is at the Company's election, subject to continued compliance with the terms of the facility, and has a one-time extension fee of 0.20% of the commitment amount of the credit facility.
(5) | There was an additional $5,464 outstanding on this facility as of March 31, 2016 for letters of credit. Up to $30,000 of the capacity on this facility can be used for letters of credit.
Unsecured Term Loans The Company has a $350,000 unsecured term loan, which bears interest at a variable rate of LIBOR plus 1.35% based on the Company's current credit ratings. The loan matures in October 2017 and has two one-year extension options for an outside maturity date of October 2019. At March 31, 2016, the outstanding borrowings of $350,000 had an interest rate of 1.78%. The Company has a $400,000 unsecured term loan, which bears interest at a variable rate of LIBOR plus 1.50% based on the Company's current credit ratings and has a maturity date of July 2018. At March 31, 2016, the outstanding borrowings of $400,000 had an interest rate of 1.94%. The Company also has a $50,000 unsecured term loan that matures in February 2018. The term loan bears interest at a variable rate of LIBOR plus 1.55%. At March 31, 2016, the outstanding borrowings of $50,000 had a weighted-average interest rate of 1.99%. Covenants and Restrictions The agreements for the unsecured lines of credit, the Notes and unsecured term loans contain, among other restrictions, certain financial covenants including the maintenance of certain financial coverage ratios, minimum unencumbered asset and interest ratios, maximum secured indebtedness ratios, maximum total indebtedness ratios and limitations on cash flow distributions. The Company believes that it was in compliance with all financial covenants and restrictions at March 31, 2016. Unsecured Lines of Credit and Unsecured Term Loans The following presents the Company's compliance with key covenant ratios, as defined, of the credit facilities and term loans as of March 31, 2016:
Ratio |  | Required |  | Actual
Debt to total asset value |  | < 60% |  | 50%
Unencumbered asset value to unsecured indebtedness |  | > 1.6x |  | 2.3x
Unencumbered NOI to unsecured interest expense |  | > 1.75x |  | 4.9x
EBITDA to fixed charges (debt service) |  | > 1.5x |  | 2.3x
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 CBL, 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. Senior Unsecured Notes The following presents the Company's compliance with key covenant ratios, as defined, of the Notes as of March 31, 2016:
Ratio |  | Required |  | Actual
Total debt to total assets |  | < 60% |  | 54%
Secured debt to total assets |  | < 45% (1) |  | 31%
Total unencumbered assets to unsecured debt |  | > 150% |  | 218%
Consolidated income available for debt service to annual debt service charge |  | > 1.5x |  | 3.2x
(1) | On January 1, 2020 and thereafter, secured debt to total assets must be less than 40%.
The agreements for the Notes 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 of the Operating Partnership will constitute an event of default under the Notes. Other 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, created as a requirement under certain loan agreements, 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 See Note 16 for information on operating property loans that were paid off or extended subsequent to March 31, 2016. Scheduled Principal Payments As of March 31, 2016, the scheduled principal amortization and balloon payments on all of the Company’s consolidated mortgage and other indebtedness, excluding extensions available at the Company’s option, are as follows:
2016 |  | $ | 578,204 |
2017 |  | 829,607 |
2018 |  | 681,207 |
2019 |  | 149,086 |
2020 |  | 568,176 |
Thereafter |  | 1,892,341 |
|  | 4,698,621 |
Net unamortized premiums |  | 153 |
|  | $ | 4,698,774 |
Of the $578,204 of scheduled principal payments in 2016, $509,060 relates to the maturing principal balance of ten operating property loans, $41,698 represents scheduled principal amortization and $27,446 relates to an operating property loan with a December 2015 maturity date, which was extended to December 2018 subsequent to March 31, 2016. Additionally, subsequent to March 31, 2016, the Company retired four operating property loans with 2016 maturity dates, with an aggregate balance of $100,009. See Note 16 for more information. Of the remaining maturities, one $11,056 operating property loan has an extension option, leaving five operating property loans with an aggregate balance of $397,995 that mature in 2016. After excluding the loans related to Midland Mall and Chesterfield Mall, we expect to refinance the $98,601 loan secured by Hamilton Place and retire the $127,173 in loans secured by Dakota Square Mall and Greenbrier Mall using our lines of credit. The Company’s mortgage and other indebtedness had a weighted-average maturity of 4.1 years as of March 31, 2016 and 4.4 years as of December 31, 2015. 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 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. 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 were used to hedge the variable cash flows associated with variable-rate debt. As of March 31, 2016, the Company had the following outstanding interest rate derivatives, which matured on April 1, 2016, that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivative |  | Number of Instruments |  | Notional Amount Outstanding
Interest Rate Swaps |  | 4 |  | $ | 100,009 |
Instrument Type |  | Location in Condensed Consolidated Balance Sheet |  | Notional Amount Outstanding |  | Designated Benchmark Interest Rate |  | Strike Rate |  | Fair Value at 3/31/16 |  | Fair Value at 12/31/15 |  | Maturity Date
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $48,337 (amortizing to $48,337) |  | 1-month LIBOR |  | 2.149% |  | $ | — |  |  | $ | (208 | ) |  | April 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $30,276 (amortizing to $30,276) |  | 1-month LIBOR |  | 2.187% |  | — |  |  | (133 | ) |  | April 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $11,313 (amortizing to $11,313) |  | 1-month LIBOR |  | 2.142% |  | — |  |  | (48 | ) |  | April 2016
Pay fixed/ Receive variable Swap |  | Accounts payable and accrued liabilities |  | $10,083 (amortizing to $10,083) |  | 1-month LIBOR |  | 2.236% |  | — |  |  | (45 | ) |  | April 2016
|  |  |  |  |  |  |  |  |  | $ | — |  |  | $ | (434 | ) |  |
|  | Gain 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 March 31, |  |  | Three Months Ended March 31, |  |  | Three Months Ended March 31,
| 2016 |  | 2015 |  |  | 2016 |  | 2015 |  |  | 2016 |  | 2015
Interest rate contracts |  | $ | 434 |  |  | $ | 360 |  |  | Interest Expense |  | $ | (443 | ) |  | $ | (523 | ) |  | Interest Expense |  | $ | — |  |  | $ | — |

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 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
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration