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Borrowings | 9 Months Ended
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Sep. 30, 2017
Debt Disclosure [Abstract] |
BORROWINGS | BORROWINGS Our borrowings as of September 30, 2017, and December 31, 2016 are summarized below (dollars in thousands):
|  | Carrying Value as of |  | As of September 30, 2017
|  | September 30, 2017 |  | December 31, 2016 |  | Stated Interest Rates(1) (Range; Wtd Avg) |  | Maturity Dates (Range; Wtd Avg)
Mortgage notes and bonds payable: |  |  |  |  |  |  |  |
Fixed-rate mortgage notes payable |  | $ | 207,618 |  |  | $ | 142,861 |  |  | 2.90%–4.47%; 3.59% |  | 6/1/2020–11/1/2041; April 2029
Fixed-rate bonds payable |  | 84,518 |  |  | 49,348 |  |  | 2.38%–4.05%; 3.13% |  | 7/30/2018–8/30/2024; June 2021
Total mortgage notes and bonds payable |  | 292,136 |  |  | 192,209 |  |  |  |  |
Deferred financing costs – mortgage notes and bonds payable |  | (1,902 | ) |  | (1,412 | ) |  | N/A |  | N/A
Mortgage notes and bonds payable, net |  | $ | 290,234 |  |  | $ | 190,797 |  |  |  |  |
Variable-rate revolving lines of credit |  | $ | 5,100 |  |  | $ | 16,550 |  |  | 3.55% |  | 4/5/2024
Total borrowings, net |  | $ | 295,334 |  |  | $ | 207,347 |  |  |  |  |
(1) | Where applicable, stated interest rates are before interest patronage (as described below).
The weighted-average interest rate charged on the above borrowings, excluding the impact of deferred financing costs and before any interest patronage, or refunded interest, was 3.44% and 3.33% for the three and nine months ended September 30, 2017, respectively, and 3.29% and 3.27% for the three and nine months ended September 30, 2016, respectively. In addition, 2016 interest patronage from our Farm Credit Notes Payable (as defined below), which we received and recorded during the six months ended June 30, 2017, resulted in a 17.2% reduction (approximately 61 basis points) to the stated interest rates on such borrowings. MetLife Borrowings MetLife Facility On May 9, 2014, we closed on a credit facility (the "MetLife Facility") with Metropolitan Life Insurance Company (“MetLife”) that originally consisted of a $100.0 million long-term note payable (the “2015 MetLife Term Note”) and a $25.0 million revolving equity line of credit (the “2015 MetLife Line of Credit”). As amended on October 5, 2016, the overall size of the MetLife Facility was increased from $125.0 million to $200.0 million (the "2016 Amendment"). Pursuant to the 2016 Amendment, the MetLife Facility now consists of the 2015 MetLife Term Note, the 2015 MetLife Line of Credit, a $50.0 million long-term note payable (the "2016 MetLife Term Note" and, together with the 2015 MetLife Term Note, the "MetLife Term Notes"), the terms of which are pari passu with those of the 2015 MetLife Term Note, and a second $25.0 million revolving equity line of credit (the "2016 MetLife Line of Credit" and, together with the 2015 MetLife Line of Credit, the "MetLife Lines of Credit"), the terms of which are pari passu to those of the 2015 MetLife Line of Credit. On September 19, 2017, we drew approximately $27.5 million on the MetLife Term Notes, which was used to repay a portion of the balance outstanding under the MetLife Lines of Credit. The interest rate on the new disbursement was 3.85% per annum (which rate is fixed through January 4, 2027) and was blended with the existing interest rate on the previously-outstanding balance under the MetLife Term Notes. The following table summarizes the pertinent terms of the MetLife Facility as of September 30, 2017 (dollars in thousands, except for footnotes):
Issuance |  | Aggregate Commitment |  | Maturity Dates |  | Principal Outstanding |  | Interest Rate Terms |  | Undrawn Commitment |
MetLife Term Notes |  | $ | 150,000 |  | (1) | 1/5/2029 |  | $ | 131,210 |  |  | 3.30%, fixed through 1/4/2027 | (2) | $ | 13,530 |  | (3),(4)
MetLife Lines of Credit |  | 50,000 |  |  | 4/5/2024 |  | 5,100 |  |  | 3-month LIBOR + 2.25% | (5) | 44,900 |  | (3)
Total principal outstanding |  |  |  | $ | 136,310 |  |  |  |  |  |
(1) | If the aggregate commitment under the MetLife Facility is not fully utilized by December 31, 2018, MetLife has the option to be relieved of its obligation to disburse the additional funds under the MetLife Term Notes.
(2) | Represents the blended interest rate on the MetLife Term Notes as of September 30, 2017. Interest rates for subsequent disbursements will be based on then-prevailing market rates. The interest rate on all then-outstanding disbursements will be subject to adjustment on January 5, 2027. Through December 31, 2018, the MetLife Term Notes are also subject to an unused fee of 0.20% on undrawn amounts.
(3) | Based on the properties that were pledged as collateral under the MetLife Facility, as of September 30, 2017, the maximum additional amount we could draw under the facility was approximately $12.9 million.
(4) | Net of amortizing principal payments of approximately $5.3 million.
(5) | The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50%, plus an unused fee of 0.20% on undrawn amounts. The interest rate spread will be subject to adjustment on October 5, 2019. As of September 30, 2017, the interest rate on the MetLife Lines of Credit was 3.55%.
Individual MetLife Notes In May 2017, we also entered into two new loan agreements with MetLife (collectively, the "Individual MetLife Notes"), the terms of which are summarized in the aggregate in the table below (dollars in thousands):
Date of Issuance |  | Amount |  | Maturity Date |  | Principal Amortization |  | Interest Rate Terms
5/31/2017 |  | $15,300 | (1) | 2/14/2022 & 2/14/2025 |  | 28.6 years |  | 3.55% & 3.85%, fixed throughout their respective terms
(1) | Proceeds from these notes were used for the acquisition of a new property.
As of September 30, 2017, we were in compliance with all covenants applicable to the MetLife Borrowings. Farm Credit Notes Payable From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements with certain Farm Credit associations, including Farm Credit of Central Florida, FLCA ("Farm Credit CFL"), Farm Credit West, FLCA ("Farm Credit West"), Cape Fear Farm Credit, ACA ("CF Farm Credit"), Farm Credit of Florida, ACA ("Farm Credit FL"), and Northwest Farm Credit Services, FLCA ("NW Farm Credit," and, collectively, with the other Farm Credit associations, "Farm Credit"). During the nine months ended September 30, 2017, we entered into the following loan agreements with Farm Credit (dollars in thousands):
Issuer |  | Date of Issuance |  | Amount(1) |  | Maturity Date |  | Principal Amortization |  | Interest Rate Terms(2)
Farm Credit CFL(3) |  | 7/13/2017 |  | $ | 5,472 |  |  | 8/1/2022 |  | 28.4 years |  | 4.47%, fixed throughout term
Farm Credit West |  | 7/17/2017 |  | 8,162 |  |  | 5/1/2037 |  | 20.0 years |  | 4.31%, fixed through 7/31/2024, variable thereafter
CF Farm Credit |  | 6/14/2017 |  | 1,301 |  |  | 7/1/2022 |  | 40.2 years |  | 4.41%, fixed throughout its term
Farm Credit FL |  | 8/9/2017 |  | 5,820 |  |  | 3/1/2037 |  | 19.5 years |  | 4.70%, fixed through 2/29/2024, variable thereafter
NW Farm Credit |  | 9/8/2017 |  | 5,460 |  |  | 9/1/2024 |  | 39.6 years |  | 4.41%, fixed throughout its term
(1) | Proceeds from these notes were used to fund new acquisitions, to repay existing indebtedness, and for other general corporate purposes.
(2) | Stated rate is before interest patronage, as discussed below.
(3) | During the three months ended September 30, 2017, we amended four existing loan agreements with Farm Credit CFL to increase the loan amounts and adjust the principal amortization and interest rate terms as shown in the table above. The amount presented in the table above represents the total additional funds advanced under the four loans. The new terms of each of these four loans are pari passu with one another.
The following table summarizes, in the aggregate, the pertinent terms of the loans outstanding from Farm Credit (collectively, the "Farm Credit Notes Payable") as of September 30, 2017 (dollars in thousands, except for footnotes):
Issuer |  | # of Loans Outstanding |  | Dates of Issuance |  | Maturity Dates |  | Principal Outstanding |  | Stated Interest Rate(1) |
Farm Credit CFL |  | 8 |  | 9/19/2014 – 7/13/2017 |  | 6/1/2020 – 10/1/2040 |  | $ | 27,472 |  |  | 4.15% | (2)
Farm Credit West |  | 3 |  | 4/4/2016 – 7/17/2017 |  | 5/1/2037 – 11/1/2041 |  | 21,054 |  |  | 3.91% | (3)
CF Farm Credit |  | 1 |  | 6/14/2017 |  | 7/1/2022 |  | 1,301 |  |  | 4.41% | (4)
Farm Credit FL |  | 1 |  | 8/9/2017 |  | 3/1/2037 |  | 5,820 |  |  | 4.70% | (4)
NW Farm Credit |  | 1 |  | 9/8/2017 |  | 9/1/2024 |  | 5,460 |  |  | 4.41% | (4)
Total |  | 14 |  |  |  |  |  | $ | 61,107 |  |  |  |
(1) | Represents the weighted-average, blended rate (before interest patronage, as discussed below) on the respective borrowings as of September 30, 2017.
(2) | In April 2017, we received interest patronage of approximately $124,000 related to interest accrued on loans from Farm Credit CFL during the year ended December 31, 2016, which resulted in a 15.8% reduction (approximately 55 basis points) to the stated interest rates on such borrowings. In March 2016, we received interest patronage related to loans from Farm Credit CFL of approximately $94,000.
(3) | In February 2017, we received interest patronage of approximately $59,000 related to interest accrued on loans from Farm Credit West during the year ended December 31, 2016, which resulted in a 21.3% reduction (approximately 76 basis points) to the stated interest rates on such borrowings. We did not receive any patronage related to loans from Farm Credit West during the prior year.
(4) | To date, no interest patronage has been received or recorded associated with these loans, as they were not outstanding during 2016.
Interest patronage, or refunded interest, on our borrowings from Farm Credit associations is recorded upon receipt and is included in Other income on our Condensed Consolidated Statements of Operations. Receipt of interest patronage typically occurs in the first half of the calendar year following the year in which the respective interest payments are made. As of September 30, 2017, we were in compliance with all covenants applicable to the Farm Credit Notes Payable. Farmer Mac Facility On December 5, 2014, we, through certain subsidiaries of our Operating Partnership, entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”), for a secured note purchase facility that provides for bond issuances up to an aggregate principal amount of $75.0 million (the “Farmer Mac Facility”). On June 16, 2016, we amended the Farmer Mac Facility to increase the maximum borrowing capacity from $75.0 million to $125.0 million and extend the term of the Bond Purchase Agreement by two years, to December 11, 2018. During the nine months ended September 30, 2017, we issued five bonds for gross proceeds of approximately $35.6 million, the terms of which are summarized, in the aggregate, in the table below (dollars in thousands):
Date of Issuance |  | Gross Proceeds(1) |  | Maturity Dates |  | Principal Amortization |  | Interest Rate Terms
1/12/2017-8/30/2017 |  | $ | 35,625 |  | (1) | 1/10/2020 – 8/30/2024 |  | None |  | 2.80% – 4.05%, fixed throughout their respective terms
(1) | Proceeds from these bonds were used for the acquisitions of new properties.
The following table summarizes, in the aggregate, the terms of the 14 bonds outstanding under the Farmer Mac Facility as of September 30, 2017 (dollars in thousands):
Dates of Issuance |  | Initial Commitment |  | Maturity Dates |  | Principal Outstanding |  | Stated Interest Rate(1) |  | Undrawn Commitment |
12/11/2014–8/30/2017 |  | $ | 125,000 |  | (2) | 7/30/2018–8/30/2024 |  | $ | 84,519 |  |  | 3.13% |  | $ | 39,118 |  | (3)
(1) | Represents the weighted-average interest rate as of September 30, 2017.
(2) | If the balance of the Farmer Mac Facility is not fully utilized by December 11, 2018, Farmer Mac has the option to be relieved of its obligations to purchase additional bonds under the facility.
(3) | As of September 30, 2017, there was no additional availability to draw under the Farmer Mac Facility, as no additional properties had been pledged as collateral.
As of September 30, 2017, we were in compliance with all covenants under the Farmer Mac Facility. Debt Service – Aggregate Maturities Scheduled principal payments of our aggregate mortgage notes and bonds payable as of September 30, 2017, for the succeeding years are as follows (dollars in thousands):
Period |  | Scheduled Principal Payments
For the remaining three months ending December 31: | 2017 |  | $ | 601 |
For the fiscal years ending December 31: | 2018 |  | 23,433 |
| 2019 |  | 11,060 |
| 2020 |  | 26,484 |
| 2021 |  | 7,242 |
| 2022 |  | 36,089 |
| Thereafter |  | 187,227 |
|  |  | $ | 292,136 |
Fair Value ASC 820 provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous, market and prioritizes the use of market-based inputs to the valuation. ASC 820-10, "Fair Value Measurements and Disclosures," establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
• | Level 1 — inputs that are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets;
• | Level 2 — inputs are based upon quoted prices for similar assets or liabilities in active or inactive markets or model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
• | Level 3 — inputs are generally unobservable and significant to the fair value measurement. These unobservable inputs are generally supported by little or no market activity and are based upon management's estimates of assumptions that market participants would use in pricing the asset or liability.
As of September 30, 2017, the aggregate fair value of our long-term, fixed-rate mortgage notes and bonds payable was approximately $286.3 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of $292.1 million. The fair value of our long-term, fixed-rate mortgage notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms. Further, due to the revolving nature of the MetLife Lines of Credit and the lack of changes in market credit spreads, their aggregate fair value as of September 30, 2017, is deemed to approximate their aggregate carrying value of $5.1 million.

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- 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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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