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Mortgage and Other Indebtedness, Net | 9 Months Ended
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Sep. 30, 2020
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 (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 secured credit facility and secured term loan as of September 30, 2020. Debt of the Operating Partnership Net mortgage and other indebtedness consisted of the following:
|  | September 30, 2020 |  |  | December 31, 2019 |
|  | Amount |  |  | Weighted- Average Interest Rate (1) |  |  | Amount |  |  | Weighted- Average Interest Rate (1) |
Fixed-rate debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-recourse loans on operating Properties |  | $ | 1,193,997 |  |  |  | 5.17 | % |  | $ | 1,330,561 |  |  |  | 5.27 | %
Senior unsecured notes due 2023 (2) |  |  | 448,265 |  |  |  | 5.25 | % |  |  | 447,894 |  |  |  | 5.25 | %
Senior unsecured notes due 2024 (3) |  |  | 299,966 |  |  |  | 4.60 | % |  |  | 299,960 |  |  |  | 4.60 | %
Senior unsecured notes due 2026 (4) |  |  | 618,136 |  |  |  | 5.95 | % |  |  | 617,473 |  |  |  | 5.95 | %
Total fixed-rate debt |  |  | 2,560,364 |  |  |  | 5.31 | % |  |  | 2,695,888 |  |  |  | 5.35 | %
Variable-rate debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recourse loans on operating Properties |  |  | 68,511 |  |  |  | 2.91 | % |  |  | 41,950 |  |  |  | 4.34 | %
Construction loan |  |  | — |  |  |  | — |  |  |  | 29,400 |  |  |  | 4.60 | %
Secured line of credit (5) |  |  | 675,925 |  |  |  | 9.50 | % |  |  | 310,925 |  |  |  | 3.94 | %
Secured term loan (5) |  |  | 438,750 |  |  |  | 9.50 | % |  |  | 465,000 |  |  |  | 3.94 | %
Total variable-rate debt |  |  | 1,183,186 |  |  |  | 9.12 | % |  |  | 847,275 |  |  |  | 3.98 | %
Total fixed-rate and variable-rate debt |  |  | 3,743,550 |  |  |  | 6.51 | % |  |  | 3,543,163 |  |  |  | 5.02 | %
Unamortized deferred financing costs (6) |  |  | (13,864 | ) |  |  |  |  |  |  | (16,148 | ) |  |  |  |
Total mortgage and other indebtedness, net |  | $ | 3,729,686 |  |  |  |  |  |  | $ | 3,527,015 |  |  |  |  |
(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 $1,736 and $2,106 as of September 30, 2020 and December 31, 2019, respectively.
(3) | The balance is net of an unamortized discount of $34 and $40 as of September 30, 2020 and December 31, 2019, respectively.
(4) | The balance is net of an unamortized discount of $6,864 and $7,527 as of September 30, 2020 and December 31, 2019, respectively.
(5) | The administrative agent informed the Company that interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at September 30, 2020 was 9.50%. The variable interest rate at LIBOR based on original terms of senior secured facility is 2.41% as of September 30, 2020.
(6) | Includes $10,524 of unamortized deferred financing costs related to the secured term loan, senior unsecured notes and certain property-level, non-recourse mortgage loans that may be required to be written off in the event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished. Additionally, intangible lease assets and other assets includes $7,180 of unamortized deferred financing costs related to the secured line of credit that may be required to be written off in the event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished.
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 $2,334,160 at September 30, 2020. Senior Unsecured Notes
Description |  | Issued (1) |  | Amount |  |  | Interest Rate |  |  | Maturity Date (2)
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) | 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 2023 Notes, the 2024 Notes and the 2026 Notes may be redeemed prior to September 1, 2023, July 15, 2024, and September 15, 2026, 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 0.40%, 0.35% and 0.50% for the 202 3 Notes, the 2024 Notes and the 202 6 Notes, respectively.
The Company elected to not make the $11,813 interest payment due and payable on June 1, 2020, with respect to the Operating Partnership’s 5.25% senior unsecured notes due 2023 (the “2023 Notes”) (the “2023 Notes Interest Payment”). The Company also elected to not make the $18,594 interest payment due and payable on June 15, 2020, with respect to the Operating Partnership’s 5.95% senior unsecured notes due 2026 (the “2026 Notes”) (the “2026 Notes Interest Payment”). The Operating Partnership did not make either the 2023 Notes Interest Payment or the 2026 Notes Interest Payment by the last day of the respective 30-day grace periods provided for in the indenture governing the 2023 Notes and the 2026 Notes. The Operating Partnership’s failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment during the applicable grace periods constituted an “event of default” with respect to each of the 2023 Notes and the 2026 Notes. On August 5, 2020, the Operating Partnership made the 2023 Notes Interest Payment to the holders of the 2023 Notes and the 2026 Notes Interest Payment to the holders of the 2026 Notes. Accordingly, from and after such payment, the nonpayment of each of the 2023 Notes Interest Payment and the 2026 Notes Interest Payment no longer constitutes (i) an “event of default” under the indenture governing the 2023 Notes and the 2026 Notes that occurred and is continuing or (ii) to the extent provided in that certain forbearance agreement, dated as of July 22, 2020 (as amended, the “Bank Forbearance Agreement”) with the Agent for the Lenders under the secured credit facility, an “event of default” under the secured credit facility. See Financial Covenants and Restrictions below for more information. As described in Note 15 – Subsequent Events, the Operating Partnership elected to not make the $6,900 interest payment due and payable on October 15, 2020, with respect to the 2024 Notes, and entered the 30-day grace period pursuant to the terms of the indenture governing the 2024 Notes. As described in Note 1 – Organization and Basis of Presentation, the filing of the Chapter 11 Cases subsequent to September 30, 2020 constituted an event of default under the indenture governing the Notes. Senior Secured Credit Facility The Company has a $1,185,000 senior secured credit facility, which includes a revolving line of credit with a borrowing capacity of $685,000 and a term loan with an outstanding balance of $438,750 at September 30, 2020. The facility matures in July 2023 and bore interest at a variable rate of LIBOR plus 2.25% through March 30, 2020. As further described in Note 1 – Organization and Basis of Presentation and in Financial Covenants and Restrictions below, the lenders have declared the outstanding obligations under the secured credit facility to be immediately due and payable. On August 6, 2020, the Operating Partnership received a notice of imposition of base rate and post-default rate letter from the administrative agent under the secured credit facility, which (i) informed the Operating Partnership that following an asserted event of default on March 19, 2020, all outstanding loans were converted to base rate loans at the expiration of the applicable interest periods and (ii) sought payment of $4,812 related thereto for April through June 2020 (the “Demand Interest”). The base rate is defined as the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the LIBOR Market Index Rate plus 1.0%, plus 1.25%. The base rate on September 30, 2020 was 4.50% based on the prime rate plus 1.25%. The administrative agent also informed the Operating Partnership that from and after August 6, 2020, interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at the time of notification and at September 30, 2020 was 9.50%. 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 terms of the facility also require the principal balance on the term loan to be reduced by $35,000 per year in quarterly installments. In March 2020, the Company drew $280,000 on its secured credit facility to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of the COVID-19 pandemic. At September 30, 2020, the secured line of credit had an outstanding balance of $675,925. As a result of the asserted defaults and events of default described under Financial Covenants and Restrictions below, the Operating Partnership cannot borrow any additional amounts under the secured line of credit. 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 four 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. See Financial Covenants and Restrictions below and Liquidity and Going Concern Considerations and Voluntary Reorganization under Chapter 11 in Note 1 – Organization and Basis of Presentation for information on the ongoing alleged defaults and events of defaults asserted by the administrative agent under the secured credit facility and the Company’s adversarial proceeding in response to the administrative agent and lenders asserting rights and remedies. Financial Covenants and Restrictions The agreements for the Notes and senior secured credit facility 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 and the senior secured credit facility. Additionally, the senior secured credit facility contains a provision that any default on a payment of non-recourse indebtedness in excess of $150,000 is also a default of the senior secured credit facility. On each of May 26, 2020, June 2, 2020, June 16, 2020, August 6, 2020 and August 19, 2020, the Operating Partnership received notices of default and reservation of rights letters from the administrative agent under the secured credit facility, which asserted that certain defaults and events of default occurred and continue to exist by reason of the Operating Partnership’s failure to comply with certain restrictive covenants under the secured credit facility and resulting from the failure to make the 2023 Notes Interest Payment and the 2026 Notes Interest Payment prior to the expiration of the applicable grace periods. Additionally, as described above under Senior Secured Credit Facility, the Operating Partnership received notices of imposition of base rate and post-default rate from the administrative agent under the secured credit facility. On August 19, 2020, the Operating Partnership received from the administrative agent (i) a notice of default and reservation of rights letter, which asserted that each of the failure to pay the Demand Interest and the entry into the RSA constituted events of default under the terms of the secured credit facility and (ii) a notice of acceleration of obligations under the secured credit facility based on the events of default previously asserted by the administrative agent, pursuant to which, the administrative agent declared all outstanding principal, interest accruing at the base rate and the post-default rate, which as previously disclosed are rates being disputed by the Company, and letters of credit to be immediately due and payable. The administrative agent also terminated the revolving and swingline commitments and the obligation to issue letters of credit under the secured credit facility and instructed the Operating Partnership to deliver approximately $1,300 in cash to collateralize outstanding letters of credit. On August 25, 2020, The Operating Partnership received a notice of imposition of base rate letter from the administrative agent under the secured credit facility, which informed the Operating Partnership that following an asserted event of default, that all outstanding loans converted to base rate loans beginning July 1, 2019 and (ii) sought payment of approximately $11,973 related thereto for July 1, 2019 through March 30, 2020. Additionally, the Operating Partnership failed to meet the minimum debt yield covenant under the secured credit facility as of September 30, 2020. As of the date of this report, the lenders under the secured credit facility have not commenced foreclosure proceedings, but they may seek to exercise one or more such remedies in the future. In addition, as a result of the events of default asserted by the administrative agent in such letters, the administrative agent may deny the Operating Partnership’s request for future LIBOR interest periods, which would result in an increase in annual interest expense of approximately $19,277 based on the base rate and $74,355 based on the post-default rate. On October 16, 2020, the Company received an additional notice of default and reservation of rights letter from the Agent which asserted that certain defaults exist and continue to exist by reason of the Operating Partnership’s failure to comply with certain restrictive covenants in the Credit Agreement and resulting from the failure to make the $6,900 interest payment that was due and payable on October 15, 2020, to holders of the 2024 Notes and that such default will constitute an event of default under the Credit Agreement if such interest is not paid within the 30-day grace period. On October 28, 2020, the Operating Partnership was notified by the administrative agent and lenders that they elected to exercise their rights pursuant to the terms of the secured credit facility to (i) require that rents payable by tenants at the properties that are collateral to the secured credit facility be paid directly to the administrative agent and (ii) exercise all voting rights and other ownership rights in respect of all the equity interests in the subsidiaries of the Operating Partnership that are guarantors of the secured credit facility. Mortgages on Operating Properties 2020 Loan Repayments
Date |  | Property |  | Interest Rate at Repayment Date |  |  | Scheduled Maturity Date |  | Principal Balance Repaid (1) |
February |  | Parkway Place |  | 6.50% |  |  | July 2020 |  | $ | 33,186 |
February |  | Valley View Mall |  | 6.50% |  |  | July 2020 |  |  | 51,360 |
|  |  |  |  |  |  |  |  |  | $ | 84,546 |
(1) | The Company retired the loans with borrowings from its secured line of credit.
2020 Loan Modification The maturity date for the fixed-rate loan secured by Jefferson Mall was extended from June 1, 2022 to June 1, 2026. The loan will be interest only through March 2021 when monthly payments of principal and interest will be made through the maturity date. 2020 Dispositions The following is a summary of the Company’s 2020 disposition for which the fixed rate loan secured by the mall was extinguished:
Sale/Transfer Date |  | Property |  | Property Type |  | Location |  | Balance of Non-recourse Debt |  |  | Gain on Extinguishment of Debt |
August |  | Hickory Point Mall (1) |  | Malls |  | Forsyth, IL |  | $ | 27,446 |  |  | $ | 15,407 |
(1) | The Company transferred title to the mall to the mortgage holder in satisfaction of the non-recourse debt secured by the property.
Loans in Default As of September 30, 2020, five non-recourse loans that are each secured by one of the Company’s malls were in default. The Company has been in discussions with the lenders for each of these properties regarding a restructure of each respective loan. As of the date of this report, the lenders under each of these loans have not accelerated the outstanding amount due and payable on the loans or commenced foreclosure proceedings, but they may seek to exercise one or more of these remedies in the future. Management has previously impaired the mall that secures each loan due to a shortened expected hold period resulting from management’s assessment that there is an increased likelihood that the loan secured by each mall may not be successfully restructured or refinanced. The non-recourse loans that are in default at September 30, 2020 are as follows:
Property |  | Location |  | Interest Rate |  |  | Scheduled Maturity Date |  | Loan Amount |
Greenbrier Mall |  | Chesapeake, VA |  | 5.41% |  |  | Dec-19 |  | $ | 61,647 |
Burnsville Center |  | Burnsville, MN |  | 6.00% |  |  | Jul-20 |  |  | 64,233 |
EastGate Mall |  | Cincinnati, OH |  | 5.83% |  |  | Apr-21 |  |  | 31,726 |
Park Plaza |  | Little Rock, AR |  | 5.28% |  |  | Apr-21 |  |  | 77,064 |
Asheville Mall |  | Asheville, NC |  | 5.80% |  |  | Sep-21 |  |  | 62,863 |
As described in Note 1 – Organization and Basis of Presentation, the filing of the Chapter 11 Cases subsequent to September 30, 2020 also constituted an event of default with respect to certain property-level debt of the Operating Partnership’s subsidiaries, which may result in automatic acceleration of the outstanding principal and accrued interest or may give the applicable lender the right to accelerate such amounts. There are 15 of such loans that have an aggregate outstanding balance of $855,864 at September 30, 2020. Scheduled Principal Payments As of September 30, 2020, 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 the secured line of credit, are as follows:
2020 (1) |  | $ | 18,988 |
2021 |  |  | 559,094 |
2022 |  |  | 408,235 |
2023 |  |  | 1,493,534 |
2024 |  |  | 343,601 |
2025 |  |  | 38,472 |
Thereafter |  |  | 764,380 |
|  |  | 3,626,304 |
Net unamortized discounts and premium |  |  | (8,634 | )
Unamortized deferred financing costs |  |  | (13,864 | )
Principal balance of loans with a maturity date prior to September 30, 2020 (2) |  |  | 125,880 |
Total mortgage and other indebtedness, net |  | $ | 3,729,686 |
(1) | Reflects payments for the fiscal period October 1, 2020 through December 31, 2020.
(2) | Represents the aggregate principal balance as of September 30, 2020 of two non-recourse loans, secured by Greenbrier Mall and Burnsville Center, which were in default. The loan secured by Greenbrier Mall matured in December 2019. The loan secured by Burnsville Center matured in July 2020.
The Company’s mortgage and other indebtedness had a weighted-average maturity of 3.1 years as of September 30, 2020 and 3.7 years as of December 31, 2019.

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