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MORTGAGE AND OTHER INDEBTEDNESS, NET | 12 Months Ended
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Dec. 31, 2019
Debt Disclosure [Abstract] |
MORTGAGE AND OTHER INDEBTEDNESS, NET | NOTE 8. 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, 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 secured line of credit and secured term loan as of December 31, 2019. Debt of the Operating Partnership Mortgage and other indebtedness, net, consisted of the following:
|  | December 31, 2019 |  |  | December 31, 2018 |
|  | Amount |  |  | Weighted- Average Interest Rate (1) |  |  | Amount |  |  | Weighted- Average Interest Rate (1) |
Fixed-rate debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-recourse loans on operating Properties |  | $ | 1,330,561 |  |  |  | 5.27 | % |  | $ | 1,783,097 |  |  |  | 5.33 | %
Senior unsecured notes due 2023 (2) |  |  | 447,894 |  |  |  | 5.25 | % |  |  | 447,423 |  |  |  | 5.25 | %
Senior unsecured notes due 2024 (3) |  |  | 299,960 |  |  |  | 4.60 | % |  |  | 299,953 |  |  |  | 4.60 | %
Senior unsecured notes due 2026 (4) |  |  | 617,473 |  |  |  | 5.95 | % |  |  | 616,635 |  |  |  | 5.95 | %
Total fixed-rate debt |  |  | 2,695,888 |  |  |  | 5.35 | % |  |  | 3,147,108 |  |  |  | 5.37 | %
Variable-rate debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recourse loan on operating Property |  |  | 41,950 |  |  |  | 4.34 | % |  |  | 68,607 |  |  |  | 4.97 | %
Construction loan |  |  | 29,400 |  |  |  | 4.60 | % |  |  | 8,172 |  |  |  | 5.25 | %
Secured line of credit |  |  | 310,925 |  |  |  | 3.94 | % |  |  | — |  |  |  | — |
Unsecured lines of credit |  |  | — |  |  |  | — |  |  |  | 183,972 |  |  |  | 3.90 | %
Secured term loan |  |  | 465,000 |  |  |  | 3.94 | % |  |  | — |  |  |  | — |
Unsecured term loans |  |  | — |  |  |  | — |  |  |  | 695,000 |  |  |  | 4.21 | %
Total variable-rate debt |  |  | 847,275 |  |  |  | 3.98 | % |  |  | 955,751 |  |  |  | 4.21 | %
Total fixed-rate and variable-rate debt |  |  | 3,543,163 |  |  |  | 5.02 | % |  |  | 4,102,859 |  |  |  | 5.10 | %
Unamortized deferred financing costs |  |  | ( 16,148 | ) |  |  |  |  |  |  | ( 15,963 | ) |  |  |  |
Liabilities related to assets held for sale (5) |  |  | — |  |  |  |  |  |  |  | ( 43,716 | ) |  |  |  |
Total mortgage and other indebtedness, net |  | $ | 3,527,015 |  |  |  |  |  |  | $ | 4,043,180 |  |  |  |  |
(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 $ 2,106 and $ 2,577, as of December 31, 2019 and 2018, respectively.
(3) | The balance is net of an unamortized discount of $ 40 and $ 47, as of December 31, 2019 and 2018, respectively.
(4) | The balance is net of an unamortized discount of $ 7,527 and $ 8,365 as of December 31, 2019 and 2018, respectively.
( 5 ) | Represents a non-recourse mortgage loan secured by Cary Towne Center that is classified on the consolidated balance sheet as liabilities related to assets held for sale. The mall was sold in January 2019. See Note 6 for more information.
Non-recourse term loans, recourse term loans, the secured line of credit and the secured term loan include loans that are secured by Properties owned by the Company that have a net carrying value of $ 2,639,827 at December 31, 2019. 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 was 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, was 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 December 31, 2019, this ratio was 32%.
(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 redemption date, 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.
Senior Secured Credit Facility In January 2019, the Company entered into a new $ 1,185,000 senior secured credit facility, which includes a fully funded $ 500,000 term loan and a revolving line of credit with a borrowing capacity of $ 685,000. The facility replaced all of the Company's prior unsecured bank facilities, which included three unsecured term loans with an aggregate balance of $ 695,000 and three unsecured revolving lines of credit with an aggregate capacity of $ 1,100,000 . At closing, the Company utilized the line of credit to reduce the principal balance of the unsecured term loan from $ 695,000 to $ 500,000 . The facility matures in July 2023 and bears interest at a variable rate of LIBOR plus 2.25%. The facility had an interest rate of 3.94 % at December 31, 2019. The Operating Partnership is required to pay an annual facility fee, to be paid quarterly, which ranges from 0.25 % to 0.35 %, based on the unused capacity of the line of credit. The principal balance on the term loan will be reduced by $ 35,000 per year in quarterly installments. At December 31, 2019, the secured line of credit had an outstanding balance of $ 310,925 and the secured term loan had an outstanding balance of $ 465,000 . The secured credit facility is secured by 17 malls and 3 associated centers that are owned by 36 wholly owned subsidiaries of the Operating Partnership (collectively the “Combined Guarantor Subsidiaries”). The Combined Guarantor Subsidiaries own an additional five malls, two associated centers and four mortgage notes receivable that are not collateral for the secured credit facility. The properties that are collateral for the secured credit facility and the properties and mortgage notes receivable that are not collateral are collectively referred to as the “Guarantor Properties.” The terms of the Notes provide that, to the extent that any subsidiary of the Operating Partnership executes and delivers a guarantee to another debt facility, the Operating Partnership shall also cause the subsidiary to guarantee the Operating Partnership’s obligations under the Notes on a senior basis. In January 2019, the Combined Guarantor Subsidiaries entered into a guarantee agreement with the issuer of the Notes to satisfy the guaranty requirement. Each of the Combined Guarantor Subsidiaries meet the criteria in Rule 3-10(f) of SEC Regulation S-X to provide condensed consolidating financial information as additional disclosure in the notes to the Operating Partnership's consolidated financial statements because each Combined Guarantor Subsidiary is 100% owned by the Operating Partnership, the guaranty issued by each Combined Guarantor Subsidiary is full and unconditional and the guaranty issued by each Combined Guarantor Subsidiary is joint and several. However, the Operating Partnership has elected to provide combined financial statements and accompanying notes for the Combined Guarantor Subsidiaries in lieu of including the consolidating financial information in the notes to its consolidated financial statements. These combined financial statements and notes are presented as an exhibit to this annual report on Form 10-K for ease of reference. Fixed-Rate Debt As of December 31, 2019, fixed-rate loans on operating Properties bear interest at stated rates ranging from 4.36% to 6.50%. Fixed-rate loans on operating Properties generally provide for monthly payments of principal and/or interest and mature at various dates through June 2026, with a weighted-average maturity of 2.1 years. 2019 Financings In April 2019, the loan secured by Volusia Mall was refinanced to increase the principal balance to $ 50,000. In addition, the maturity date was extended to May 2024 and the fixed interest rate was reduced from 8.00% to 4.56%. The net proceeds from the new loan were used to retire the $ 41,000 existing loan and a portion of the loan secured by Honey Creek Mall, as described below. In May 2019, the Company exercised an option to extend the loan secured by The Outlet Shoppes at Laredo to May 2021. In conjunction with the amendment, a payment of $ 10,800 was made to reduce the outstanding balance of the loan to $ 43,000. The noncontrolling interest partner in the joint venture funded its 35% share of the $10,800 payment. 2018 Financings The following table presents the fixed-rate loans secured by the related consolidated Properties that were entered into in 2018:
Date |  | Property |  | Stated Interest Rate |  |  | Maturity Date |  | Amount Financed or Extended |
August |  | Hickory Point Mall (1) |  |  | 5.85 | % |  | December 2019 |  | $ | 27,446 |
September |  | The Outlet Shoppes at El Paso (2) |  |  | 5.10 | % |  | October 2028 |  |  | 75,000 |
|  |  |  |  |  |  |  |  |  | $ | 102,446 |
(1) | The Company exercised the extension option under the mortgage loan.
(2) | The Company owned 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.
Loan Repayments The Company repaid the following fixed-rate loans, secured by the related consolidated Properties, in 2019 and 2018:
Date |  | Property |  | Interest Rate at Repayment Date |  |  | Scheduled Maturity Date |  | Principal Balance Repaid (1) |
2019: |  |  |  |  |  |  |  |  |  |  |  |
April |  | Honey Creek Mall (2) |  | 8.00% |  |  | July 2019 |  | $ | 23,539 |
December |  | The Terrace |  | 7.25% |  |  | June 2020 |  |  | 11,931 |
|  |  |  |  |  |  |  |  |  | $ | 35,470 |
2018: |  |  |  |  |  |  |  |  |  |  |  |
January |  | Kirkwood Mall |  | 5.75% |  |  | April 2018 |  | $ | 37,295 |
(1) | The Company retired the loans with borrowings from its credit facilities unless otherwise noted.
(2) | The Company retired the loan using proceeds from the refinancing of the loan secured by Volusia Mall as well as proceeds from the sale of Honey Creek Mall.
Dispositions The following is a summary of the Company's dispositions for which the fixed-rate loan secured by the mall was extinguished:
Sale/Transfer Date |  | Property |  | Interest Rate at Repayment Date |  |  | Scheduled Maturity Date |  | Balance of Non-recourse Debt |  |  | Gain on Extinguishment of Debt |
2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January |  | Acadiana Mall (1) |  | 5.67% |  |  | April 2017 |  | $ | 119,760 |  |  | $ | 61,795 |
January |  | Cary Towne Center (2) |  | 4.00% |  |  | June 2018 |  |  | 43,716 |  |  |  | 9,927 |
|  |  |  |  |  |  |  |  |  | $ | 163,476 |  |  | $ | 71,722 |
(1) | The Company transferred title to the mall to the mortgage holder in satisfaction of the non-recourse debt secured by the Property.
(2) | The Company sold the mall for $ 31,500 and the net proceeds from the sale were used to satisfy a portion of the loan secured by the mall. The remaining principal balance was forgiven.
Variable-Rate Debt The recourse loan secured by The Outlet Shoppes at Laredo bears interest at a variable interest rate indexed to LIBOR. At December 31, 2019, the interest rate was 4.34%. This loan matures in May 2021. Loan Repayments The Company repaid the following variable-rate loans, secured by the related consolidated properties in 2018:
Date |  | Property |  | Interest Rate at Repayment Date |  |  | Scheduled Maturity Date |  | Principal Balance Repaid (1) |
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 |
|  |  |  |  |  |  |  |  |  | $ | 17,278 |
(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 6 for more information.
(3) | The loan secured by the Property was retired when the joint venture closed on a new fixed-rate loan in September 2018 as described above.
Construction Loan Financing The Company entered into a construction loan in October 2018 to redevelop anchor space at Brookfield Square. The construction loan bears interest at a variable interest rate indexed to LIBOR. At December 31, 2019, the interest rate was 4.6%. This loan matures in October 2021 and has one 12-month extension option for an outside maturity date of October 2022. The total borrowing capacity on the loan is $ 29,400. Financial Covenants and Restrictions The agreements for the secured credit facility and the Notes 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 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. The Company believes that it was in compliance with all financial covenants and restrictions at December 31, 2019. Other Several of the Company’s Properties are owned by special purpose entities, created as a requirement under certain loan agreements that are included in the Company’s 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. Scheduled Principal Payments As of December 31, 2019, 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, are as follows:
2020 |  | $ | 222,353 |
2021 |  |  | 556,878 |
2022 |  |  | 465,455 |
2023 |  |  | 1,126,825 |
2024 |  |  | 341,398 |
Thereafter |  |  | 747,741 |
|  |  | 3,460,650 |
Net unamortized discounts and premium |  |  | ( 9,673 | )
Unamortized deferred financing costs |  |  | ( 16,148 | )
Principal balance of loan secured by Lender Malls in default (1) |  |  | 92,186 |
Total mortgage and other indebtedness, net |  | $ | 3,527,015 |
(1) | Represents the aggregate principal balance as of December 31, 2019 of two non-recourse loans, secured by Greenbrier Mall and Hickory Point Mall, which were in default. The loans secured by Greenbrier Mall and Hickory Point Mall matured in December 2019. |
Of the $ 222,353 of scheduled principal payments in 2020, $ 149,670 relates to the maturing principal balances of three operating Property loans and $ 72,683 relates to scheduled principal amortization. Subsequent to December 31, 2019, the Company retired $ 84,803 related to two of the three operating Property loans scheduled to mature in 2020. See Note 20 for more information. Additionally, subject to the need to maintain compliance with all applicable debt covenants, the Operating Partnership, or any affiliate of the Operating Partnership, may at any time, or from time to time, repurchase outstanding Notes in the open market or otherwise. Such Notes may, at the option of the Operating Partnership or the relevant affiliate of the Operating Partnership, be held, resold or surrendered to the Trustee for cancellation.

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