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NOTES PAYABLE

12 Months Ended

Apr. 30, 2023

NOTES PAYABLE

NOTES PAYABLE

(6)          NOTES PAYABLE

​

The following tables present information on the Company’s notes payable in effect as of April 30, 2023 (dollars in thousands):

​	​	​	​	​	​	​	​	​	​	​	​
​		​		Principal Amount			​	​	​	​	​
​	​	​	​	Available for		​	Outstanding
(data as of April 30)	​	​	​	New Borrowings		​	Principal Amount
Loan Identifier	​	Lender	​	2023		​	2023			2022
Revolving Line of Credit		BOKF	​	$	4,177	​	$	—	​	$	—
La Mirada		BOKF	​		—	​		—	​		2,030
Equipment Financing	​	DC	​	​	—	​	​	44	​	​	—
Total	​	​	​	$	4,177	​	$	44	​	$	2,030

​

​	​	​	​	​	​	​	​
(data as of April 30, 2023)	​	​		Mortgaged Property		​	​
Loan Identifier		Interest Rate		Book Value		​	Scheduled Maturity
Revolving Line of Credit		8.03	%	$	1,721		August 2025
La Mirada		8.03	%		8,210		June 2024
Equipment Financing	​	2.35	%	​	43	​	June 2028

​

​	​	​	​	​	​	​	​	​	​	​	​	​
(data for year ended April 30)		Principal Repayments						Capitalized Interest and Fees
Loan Identifier	​	2023			2022		​	2023			2022
Revolving Line of Credit	​	$	—	​	$	—	​	$	—	​	$	—
La Mirada	​		2,030	​		3,468	​		57	​		193
Equipment Financing	​		7	​		—	​		—	​		—
Total	​	$	2,037	​	$	3,468	​	$	57	​	$	193

​

As of April 30, 2023, the Company and each of its subsidiaries were in compliance with the financial covenants contained in the loan documentation for the then outstanding notes payable. Additional information regarding each of the above notes payable is provided below.

· Revolving Line of Credit. In February 2021, AMREP Southwest Inc. (“ASW”), a subsidiary of the Company, entered into a Loan Agreement with BOKF, NA dba Bank of Albuquerque (“BOKF”). The Loan Agreement is evidenced by a Revolving Line of Credit Promissory Note and is secured by a Line of Credit Mortgage, Security Agreement and Fixture Filing, between ASW and BOKF, with respect to a 298-acre property within the Paseo Gateway subdivision located in Rio Rancho. BOKF has agreed to lend up to $5,750,000 to ASW on a revolving line of credit basis for general corporate purposes, including up to $250,000 dedicated for use in connection with a company credit card. The outstanding principal amount of the loan may be prepaid at any time without penalty. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the one-month secured overnight financing rate as administered by the CME Group Benchmark Administration Limited plus a spread of 3.15%, adjusted monthly.

ASW made certain representations and warranties in connection with this loan and is required to comply with various covenants, reporting requirements and other customary requirements for similar loans, including ASW and its subsidiaries having at least $3.0 million of unencumbered and unrestricted cash, cash equivalents and marketable securities in order to be entitled to advances under the loan. The loan documentation contains customary events of default for similar financing transactions, including: ASW’s failure to make principal, interest or other payments when due; the failure of ASW to observe or perform its covenants under the loan documentation; the representations and warranties of ASW being false; the insolvency or bankruptcy of ASW; and the failure of ASW to maintain a net worth of at least $32 million. Upon the occurrence and during the continuance of an event of default, BOKF may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. ASW incurred customary costs and expenses and paid certain fees to BOKF in connection with the loan.

● La Mirada. In June 2021, Wymont LLC (“Wymont”), a subsidiary of the Company, acquired a 15-acre property in Albuquerque, New Mexico comprising the La Mirada subdivision. In June 2021, Wymont entered into a Development Loan Agreement with BOKF. The Development Loan Agreement is evidenced by a Non-Revolving Line of Credit Promissory Note and is secured by a Mortgage, Security Agreement and Financing Statement, between Wymont and BOKF, with respect to the acquired property. Pursuant to a Guaranty Agreement entered into by ASW in favor of BOKF, ASW guaranteed Wymont’s obligations under each of the above agreements. BOKF has agreed to lend up to $7,375,000 to Wymont on a non-revolving line of credit basis to partially fund the acquisition and development of the acquired property. The outstanding principal amount of the loan may be prepaid at any time without penalty. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to the London Interbank Offered Rate for a thirty-day interest period plus a spread of 3.0%, adjusted monthly, subject to a minimum interest rate of 3.75%. Generally, BOKF is required to release the lien of its mortgage on any commercial lot within the acquired property upon Wymont making a principal payment equal to the net sales proceeds with respect to the sale of such lot. BOKF is required to release the lien of its mortgage on any residential lot within the acquired property upon Wymont making a principal payment equal to $60,600 per such released lot.

Wymont and ASW made certain representations and warranties in connection with this loan and are required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including: Wymont’s failure to make principal, interest or other payments when due; the failure of Wymont or ASW to observe or perform their respective covenants under the loan documentation; the representations and warranties of Wymont or ASW being false; the insolvency or bankruptcy of Wymont or ASW; and the failure of ASW to maintain a net worth of at least $32 million. Upon the occurrence and during the continuance of an event of default, BOKF may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. Wymont incurred customary costs and expenses and paid certain fees to BOKF in connection with the loan.

● Equipment Financing. In June 2022, Rioscapes LLC (“Rioscapes”), a subsidiary of the Company, entered into a Loan Contract-Security Agreement with Deere & Company (“DC”). The loan is secured by a security interest in certain construction equipment. DC lent $50,000 to Rioscapes on a non-revolving line of credit basis to fund the acquisition of the construction equipment. ASW guaranteed Rioscapes’s obligations under the loan. The principal is payable monthly based on a 72-month amortization and the outstanding principal amount of the loan may be prepaid at any time without penalty. Interest on the outstanding principal amount of the loan is payable monthly at the annual rate equal to 2.35%. Rioscapes made certain representations and warranties in connection with this loan and is required to comply with various covenants, reporting requirements and other customary requirements for similar loans. The loan documentation contains customary events of default for similar financing transactions, including: Rioscapes’s failure to make principal, interest or other payments when due; the failure of Rioscapes to observe or perform its covenants under the loan documentation; the representations and warranties of Rioscapes being false; the insolvency or bankruptcy of Rioscapes or ASW; the merger by Rioscapes or ASW into another entity; and the sale by Rioscapes or ASW of substantially all of their assets. Upon the occurrence and during the continuance of an event of default, DC may declare the outstanding principal amount and all other obligations under the loan immediately due and payable. Rioscapes incurred customary costs and expenses and paid certain fees to DC in connection with the loan.

● Letter of Credit and Loan Reserves. As of April 30, 2023, the Company had (a) a letter of credit outstanding under its Revolving Line of Credit in the principal amount of $1,323,000 in favor of a municipality guarantying the completion of improvements in a subdivision being constructed by the Company and (b) $250,000 reserved under its Revolving Line of Credit for credit card usage. As of April 30, 2023, the Company had loan reserves outstanding under its note payable for La Mirada in the aggregate principal amount of $2,364,000 in favor of a municipality guarantying the completion of improvements in a subdivision being constructed by the Company. The amounts under the letter of credit and loan reserves are not reflected as outstanding principal in notes payable.

The following table summarizes the notes payable scheduled principal repayments subsequent to April 30, 2023 (in thousands):

​	​	​	​
Fiscal Year		Scheduled Payments
2024	​	$	8
2025	​		8
2026	​		8
Thereafter	​	​	20
Total	​	$	44

​

The following table presents information on the Company’s notes payable in effect during 2023 or 2022 and terminated prior to April 30, 2023 (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Original		​	Outstanding
​	​	​	​	Maximum		​	Principal Amount
​	​	​	​	Available		​	April 30,
Loan Identifier		Lender		Principal Amount			2023		​	2022
Lomas Encantadas U2B P3		BOKF	​	$	2,400	​	$	—	​	$	410
Hawk Site U37		SLFCU	​		3,000	​		—	​	​	—
Hawk Site U23 U40		BOKF	​		2,700	​		—	​	​	30
Lavender Fields – acquisition		Seller	​		1,838	​		—	​	​	1,749
Lavender Fields – development		BOKF	​		3,750	​		—	​	​	1,293

​

Additional information regarding each of the above terminated notes payable is provided below:

● Lomas Encantadas U2B P3. In September 2020, Lomas Encantadas Development Company LLC (“LEDC”), a subsidiary of the Company, entered into a Development Loan Agreement with BOKF. The Development Loan Agreement was evidenced by a Non-Revolving Line of Credit Promissory Note and was secured by a Mortgage, Security Agreement and Financing Statement, between LEDC and BOKF with respect to certain planned residential lots within the Lomas Encantadas subdivision located in Rio Rancho. The loan was scheduled to mature in September 2023.The outstanding principal amount of the loan was prepaid without penalty and the loan was terminated in January 2022.

● Hawk Site U37. In February 2020, Mountain Hawk East Development Company LLC (“MHEDC”), a subsidiary of the Company, entered into a Business Loan Agreement with Sandia Laboratory Federal Credit Union (“SLFCU”). The Business Loan Agreement was evidenced by a Promissory Note, and was secured by a Line of Credit Mortgage, between MHEDC and SLFCU, with respect to certain planned residential lots within the Hawk Site subdivision located in Rio Rancho. The loan was scheduled to mature in August 2022. The outstanding principal amount of the loan was prepaid without penalty and the loan was terminated in October 2021.

● Hawk Site U23 U40. In January 2021, Mountain Hawk West Development Company LLC (“MHWDC”), a subsidiary of the Company, entered into a Development Loan Agreement with BOKF. The Development Loan Agreement was evidenced by a Non-Revolving Line of Credit Promissory Note and was secured by a Mortgage, Security Agreement and Financing Statement, between MHWDC and BOKF, with respect to certain planned residential lots within the Hawk Site subdivision located in Rio Rancho. The loan was scheduled to mature in July 2023.The outstanding principal amount of the loan was prepaid without penalty and the loan was terminated in April 2022.

● Lavender Fields. In June 2020, Lavender Fields, LLC (“LF”), a subsidiary of the Company, acquired 28 acres in Bernalillo County, New Mexico comprising the Meso AM subdivision, which has been developed into 82 finished residential lots.

o Acquisition. The acquisition included $1,838,000 of deferred purchase price, of which $919,000 was payable on or before June 2021 and $919,000 was payable on or before June 2022. The deferred purchase price was evidenced by a non-interest bearing Promissory Note and was secured by a Mortgage, Security Agreement and Fixture Filing with respect to the acquired property. In May 2021, LF and the holder of the promissory note evidencing the deferred purchase price agreed to reduce the deferred purchase price by $45,000 and the remaining outstanding deferred purchase price of $1,704,000 was fully paid by LF.

o Development. In June 2020, LF entered into a Development Loan Agreement with BOKF. The Development Loan Agreement was evidenced by a Non-Revolving Line of Credit Promissory Note and was secured by a Mortgage, Security Agreement and Financing Statement, between LF and BOKF with respect to the acquired property. The loan was scheduled to mature in June 2024. The outstanding principal amount of the loan was prepaid without penalty and the loan was terminated in April 2022.

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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.

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