Mortgage and Other Indebtedness, Net

3 Months Ended

Mar. 31, 2023

Note 8 – Mortgage and Other Indebtedness, Net

CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries that it has a direct or indirect ownership interest in are the borrowers on all the Company's debt.

CBL is a limited guarantor of the secured term loan for losses suffered solely by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates.

The Company’s mortgage and other indebtedness, net, consisted of the following:


	March 31, 2023						December 31, 2022
	Amount			Weighted- Average Interest Rate (1)			Amount			Weighted- Average Interest Rate (1)
Fixed-rate debt:
Open-air centers and outparcels loan	$	180,000			6.95	%	$	180,000			6.95	%
Non-recourse loans on operating properties		792,999			4.85	%		843,634			4.90	%
Total fixed-rate debt		972,999			5.24	%		1,023,634			5.26	%
Variable-rate debt:
Secured term loan (2)		816,739			7.41	%		829,452			6.87	%
Open-air centers and outparcels loan		180,000			8.77	%		180,000			8.22	%
Non-recourse loans on operating properties		55,965			7.80	%		56,490			7.26	%
Total variable-rate debt		1,052,704			7.66	%		1,065,942			7.12	%
Total fixed-rate and variable-rate debt		2,025,703			6.50	%		2,089,576			6.21	%
Unamortized deferred financing costs		(15,903	)					(17,101	)
Debt discounts (3)		(63,371	)					(72,289	)
Total mortgage and other indebtedness, net	$	1,946,429					$	2,000,186

(1)

Weighted-average interest rate excludes amortization of deferred financing costs.

(2)

The Operating Partnership provided a limited guaranty up to a maximum of $175,000 (the “Principal Liability Cap”). The Principal Liability Cap will be reduced by an amount equal to 100% of the first $2,500 in principal amortization made by HoldCo I each calendar year and will be reduced further by 50% of the principal amortization payments made by HoldCo I each calendar year in excess of the first $2,500 in principal amortization for such calendar year. As of March 31, 2023, the Principal Liability Cap had been reduced to $129,241. The Principal Liability Cap is eliminated when the loan balance is reduced below $650,000.

(3)

In conjunction with fresh start accounting, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing a debt discount upon emerging from bankruptcy. The debt discount is accreted over the term of the respective debt using the effective interest method. The remaining debt discounts at March 31, 2023 will be accreted over a weighted average period of 2.7 years.

Non-recourse loans on operating properties, the open-air centers and outparcels loan and the secured term loan include loans that are secured by properties owned by the Company that have a carrying value of $1,572,974 at March 31, 2023.

2023 Loan Activity

In February 2023, the loan secured by Fayette Mall was extended through May 2024. The interest rate remains fixed at 4.25%. The outstanding balance of the loan secured by Fayette Mall was $125,534 as of March 31, 2023.

In March 2023, the secured term loan was amended to replace LIBOR with the secured overnight financing rate ("SOFR") for purposes of calculating interest. The transition to SOFR is effective as of June 30, 2023. The interest rate on the conversion date will be SOFR plus the applicable margin (2.75%) plus the SOFR adjustment (0.11448%).

Subsequent to March 31, 2023, the Operating Partnership entered into an interest rate swap. See Note 14 for additional information.

Scheduled Principal Payments

As of March 31, 2023, 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:


2023 (1)	$	180,237
2024		188,860
2025		828,607
2026		375,588
2027		360,895
2028		950
Thereafter		61,905
Total		1,997,042
Principal balance of loans with maturity date prior to March 31, 2023 (2)		28,661
Total mortgage and other indebtedness	$	2,025,703

(1)

Reflects scheduled principal amortization and balloon payments for the fiscal period April 1, 2023 through December 31, 2023.

(2)

Represents the principal balance as of March 31, 2023 of the loan secured by WestGate Mall, which is in maturity default. The Company is in discussions with the lender. The loan matured in July 2022 and had a balance of $28,661 as of March 31, 2023.

Of the $180,237 of scheduled principal payments for the remainder of 2023, $152,153 relates to the maturing principal balance of three operating property loans. Subsequent to March 31, 2023, the loan secured by Cross Creek Mall was extended through May 20, 2023. The Company remains in discussions with the lender regarding a long-term extension. See Note 14.