XML 29 R14.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Mortgage and Other Indebtedness, Net | 9 Months Ended
--- | ---
Sep. 30, 2018
Debt Disclosure [Abstract] |
Mortgage and Other Indebtedness, Net | Mortgage and Other Indebtedness, Net 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 Senior Unsecured Notes (the "Notes"), as described below, 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 September 30, 2018. Debt of the Operating Partnership Net mortgage and other indebtedness consisted of the following:
| September 30, 2018 |  | December 31, 2017
| Amount |  | Weighted- Average Interest Rate (1) |  | Amount |  | Weighted- Average Interest Rate (1)
Fixed-rate debt: |  |  |  |  |  |  |  |
Non-recourse loans on operating properties | $ | 1,797,080 |  |  | 5.33% |  | $ | 1,796,203 |  |  | 5.33%
Senior unsecured notes due 2023 (2) | 447,309 |  |  | 5.25% |  | 446,976 |  |  | 5.25%
Senior unsecured notes due 2024 (3) | 299,951 |  |  | 4.60% |  | 299,946 |  |  | 4.60%
Senior unsecured notes due 2026 (4) | 616,436 |  |  | 5.95% |  | 615,848 |  |  | 5.95%
Total fixed-rate debt | 3,160,776 |  |  | 5.37% |  | 3,158,973 |  |  | 5.37%
Variable-rate debt: |  |  |  |  |  |  |  |  |
Non-recourse loan on operating property (5) | — |  |  | —% |  | 10,836 |  |  | 3.37%
Recourse loans on operating properties | 74,150 |  |  | 4.73% |  | 101,187 |  |  | 4.00%
Unsecured lines of credit | 201,358 |  |  | 3.65% |  | 93,787 |  |  | 2.56%
Unsecured term loans | 695,000 |  |  | 3.96% |  | 885,000 |  |  | 2.81%
Total variable-rate debt | 970,508 |  |  | 3.95% |  | 1,090,810 |  |  | 2.90%
Total fixed-rate and variable-rate debt | 4,131,284 |  |  | 5.04% |  | 4,249,783 |  |  | 4.74%
Unamortized deferred financing costs | (15,476 | ) |  |  |  | (18,938 | ) |  |
Total mortgage and other indebtedness, net | $ | 4,115,808 |  |  |  |  | $ | 4,230,845 |  |  |
(1) | Weighted-average interest rate includes the effect of debt premiums and discounts, but excludes amortization of deferred financing costs.
(2) | The balance is net of an unamortized discount of $2,691 and $3,024 as of September 30, 2018 and December 31, 2017, respectively.
(3) | The balance is net of an unamortized discount of $49 and $54 as of September 30, 2018 and December 31, 2017, respectively.
(4) | The balance is net of an unamortized discount of $8,564 and $9,152 as of September 30, 2018 and December 31, 2017, respectively.
(5) | The loan was retired in conjunction with the sale of the property in September 2018. See Mortgages on Operating Properties section below.
Senior Unsecured Notes
Description |  | Issued (1) |  | Amount |  | Interest Rate (2) |  | Maturity Date (3)
2023 Notes |  | November 2013 |  | $ | 450,000 |  |  | 5.25% |  | December 2023
2024 Notes |  | October 2014 |  | 300,000 |  |  | 4.60% |  | October 2024
2026 Notes |  | December 2016 / September 2017 |  | 625,000 |  |  | 5.95% |  | December 2026
(1) | Issued by the Operating Partnership. CBL is a limited guarantor of the Operating Partnership's obligations under the Notes as described above.
(2) | Interest is payable semiannually in arrears. The interest rate for the 2024 Notes and the 2023 Notes is 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 required ratio of secured debt to total assets for the 2026 Notes is 40% or less. As of September 30, 2018, this ratio was 24% as shown below.
(3) | 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 and not more than 60 days' notice to the holders of the Notes to be redeemed. The 2026 Notes, the 2024 Notes and the 2023 Notes may be redeemed prior to September 15, 2026, July 15, 2024, and September 1, 2023, respectively, for cash at a redemption price equal to the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date and a make-whole premium calculated in accordance with the indenture. On or after the respective dates noted above, the Notes are redeemable for cash at a redemption price equal to the aggregate principal amount of the Notes to be redeemed plus accrued and unpaid interest. If redeemed prior to the respective dates noted above, each issuance of Notes is redeemable at the treasury rate plus 0.50%, 0.35% and 0.40% for the 2026 Notes, the 2024 Notes and the 2023 Notes, respectively.
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 1.550% based on the credit ratings for the Operating Partnership's senior unsecured long-term indebtedness. In August 2018, Standard & Poor's ("S&P") lowered its rating from BBB- to BB+, which caused the Company's interest rates to increase in September 2018. As of September 30, 2018, the Operating Partnership's interest rate is LIBOR plus 1.550%, based on the credit ratings of its unsecured long-term indebtedness of Ba1 from Moody's Investors Service ("Moody's"), BB+ from S&P and BB+ from Fitch Ratings ("Fitch"). Additionally, the Company pays an annual facility fee that ranges from 0.125% to 0.300% of the total capacity of each facility based on the credit ratings described above. As of September 30, 2018, the annual facility fee was 0.30%. The three unsecured lines of credit had a weighted-average interest rate of 3.65% at September 30, 2018. The following summarizes certain information about the Company's unsecured lines of credit as of September 30, 2018:
|  | 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 |  | (3) | 47,695 |  |  | October 2019 |  | October 2020 | (4)
Wells Fargo - Facility B |  | 500,000 |  | (1) | 153,663 |  | (5) | October 2020 |  |  |
|  | $ | 1,100,000 |  | (6) | $ | 201,358 |  |  |  |  |  |
(1) | Up to $30,000 of the capacity on this facility can be used for letters of credit.
(2) | The extension option is at the Company's election, subject to continued compliance with the terms of the facility, and has a one-time extension fee of 0.15% of the commitment amount of the credit facility.
(3) | 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 $4,833 outstanding on this facility as of September 30, 2018 for letters of credit.
(6) | See debt covenant section below for limitation on excess capacity.
Unsecured Term Loans The following summarizes certain information about the Company's unsecured term loans as of September 30, 2018:
|  | Total Outstanding |  | Interest Rate Spread |  | Interest Rate |  | Maturity Date |  | Extended Maturity Date |
Wells Fargo - $350,000 term loan |  | $ | 350,000 |  |  | LIBOR + 1.75% |  | 3.85% |  | October 2018 |  | October 2019 | (1)
Wells Fargo - $300,000 term loan |  | 300,000 |  |  | LIBOR + 2.00% |  | 4.10% |  | July 2020 |  | July 2022 | (2)
First Tennessee - $45,000 term loan |  | 45,000 |  |  | LIBOR + 1.65% |  | 3.75% |  | June 2021 |  | June 2022 |
|  | $ | 695,000 |  |  |  |  |  |  |  |  |  |
(1) | Subsequent to September 30, 2018, the Company exercised the extension option. See Note 14.
(2) | The loan has two one-year extension options, the second of which is at the lender's discretion.
Financial 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 September 30, 2018. 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 September 30, 2018:
Ratio |  | Required |  | Actual
Debt to total asset value |  | < 60% |  | 53 | % |
Unsecured indebtedness to unencumbered asset value |  | < 60% |  | 49 | % | (1)
Unencumbered NOI to unsecured interest expense |  | > 1.75x |  | 2.6 | x |
EBITDA to fixed charges (debt service) |  | > 1.5x |  | 2.3 | x |
(1) | The debt covenant limits the total amount of unsecured indebtedness the Company may have outstanding, which varies over time based on the ratio. Based on the Company’s outstanding unsecured indebtedness as of September 30, 2018, the total amount available to the Company on its lines of credit was $697,627. Therefore, the Company had additional availability of $491,436 based on the outstanding balances of the lines of credit as of September 30, 2018.
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 September 30, 2018:
Ratio |  | Required |  | Actual
Total debt to total assets |  | < 60% |  | 52%
Secured debt to total assets |  | < 40% (1) |  | 24%
Total unencumbered assets to unsecured debt |  | > 150% |  | 215%
Consolidated income available for debt service to annual debt service charge |  | > 1.5x |  | 2.7x
(1) | Secured debt to total assets must be less than 45% for the 2023 Notes and the 2024 Notes until January 1, 2020.
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. Mortgages on Operating Properties 2018 Financings The following table presents the loan, secured by the related consolidated property, that was entered into in 2018:
Date |  | Property |  | Stated Interest Rate |  | Maturity Date |  | Amount Financed
September |  | The Outlet Shoppes at El Paso (1) |  | 5.10% |  | October 2028 |  | $ | 75,000 |
(1) | The Company owns the property in a 75/25 consolidated joint venture. A portion of the proceeds from the non-recourse loan was used to retire a recourse loan secured by Phase II of The Outlet Shoppes at El Paso as described below.
In August 2018, the Company exercised an option to extend the $27,446 loan secured by Hickory Point Mall to December 2019. Subsequent to September 30, 2018, the Company closed on a construction loan for the redevelopment of the former Sears store at Brookfield Square. See Note 14 for more information. 2018 Loan Repayments The Company repaid the following loans, secured by the related consolidated properties, in 2018:
Date |  | Property |  | Interest Rate at Repayment Date |  | Scheduled Maturity Date |  | Principal Balance Repaid (1)
January |  | Kirkwood Mall |  | 5.75% |  | April 2018 |  | $ | 37,295 |
August |  | Statesboro Crossing (2) |  | 4.24% |  | June 2019 |  | 10,753 |
September |  | The Outlet Shoppes at El Paso - Phase II (3) |  | 4.73% |  | December 2018 |  | 6,525 |
|  |  |  |  |  |  |  | $ | 54,573 |
(1) | The Company retired the loans with borrowings from its credit facilities unless otherwise noted.
(2) | The loan was retired in conjunction with the sale of the property that secured the loan. See Note 5 for more information.
(3) | In July 2018, the loan secured by the property was extended from July 2018 to December 2018. It was subsequently retired when the joint venture closed on a new loan in September 2018 as described above.
Other On June 4, 2018, t he Company was notified by IKEA that, as a result of a shift in its corporate strategy, it was terminating the contract to purchase land at Cary Towne Center, upon which it would develop and open a store. In accordance with the terms of the $43,716 interest-only non-recourse loan that is secured by the mall, the loan matured on the date of the IKEA contract termination and is in default as of September 30, 2018. In August 2018, the Company and the lender executed a forbearance agreement. See Note 4 for information on the loss on impairment of real estate that the Company recorded in June 2018. Scheduled Principal Payments As of September 30, 2018, 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:
2018 |  | $ | 411,284 |
2019 |  | 309,346 |
2020 |  | 661,816 |
2021 |  | 499,321 |
2022 |  | 432,546 |
Thereafter |  | 1,706,132 |
|  | 4,020,445 |
Unamortized discounts |  | (11,304 | )
Unamortized deferred financing costs |  | (15,476 | )
Principal balance of loan secured by Lender Mall in foreclosure (1) |  | 122,143 |
Total mortgage and other indebtedness, net |  | $ | 4,115,808 |
(1) | Represents the principal balance of the non-recourse loan, secured by Acadiana Mall, which is in default. The loan matured in 2017.
Of the $411,284 of scheduled principal payments in 2018, $43,716 relates to the principal balance of the operating property loan secured by Cary Towne Center, $350,000 represents the principal balance of one unsecured term loan and $17,568 relates to scheduled principal amortization. In August 2018, the Company entered into a forbearance agreement with the lender on the loan secured by Cary Towne Center, which is in default. Subsequent to September 30, 2018, the unsecured term loan was extended. See Note 14 for more information. The Company is in the process of refinancing the $350,000 unsecured term loan that matures in October 2019. The refinancing will also include the $300,000 unsecured term loan, the $45,000 unsecured term loan and the three unsecured lines of credit with an aggregate capacity of $1,100,000. The unsecured term loans and lines of credit will be converted from unsecured to secured facilities. The Company has agreed with Wells Fargo, as lead lender, on a pool of properties that will serve as collateral for the new secured term loans and secured lines of credit. The due diligence on these properties is ongoing and is expected to be completed by January 2019. Until due diligence is complete, the number and specific properties comprising the collateral pool may change. Wells Fargo will secure commitments from additional banks as participants in the new facilities; however, the composition of the lenders and the amount that each will hold will be subject to the final approval of each lender. As of the date of the filing of these financial statements, management has obtained the approval of the Board of Directors and has agreed to a non-binding term sheet with Wells Fargo that includes a longer-term maturity. It is expected that the refinancing will close in January 2019. In the unlikely event the secured facility is not closed, management intends to utilize availability under the existing unsecured lines of credit to retire the $350,000 unsecured term loan that matures in October 2019. The $300,000 and the $45,000 term loans have a final maturity of July 2022 and June 2022, respectively, and the combined $1,100,000 lines of credit have a final maturity of October 2020. The Company’s mortgage and other indebtedness had a weighted-average maturity of 3.9 years as of September 30, 2018 and 4.4 years as of December 31, 2017.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration