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DEBT | 3 Months Ended
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Mar. 31, 2020
Debt Disclosure [Abstract] |
DEBT | DEBT Information on our debt is as follows:
|  | March 31, 2020 |  | December 31, 2019
|  | (in thousands)
Mortgage loan with a fixed interest rate of 4.14% per annum, with monthly payments of interest only, and a balance of $97,100,000 due on July 1, 2026. The loan is nonrecourse. |  | $ | 97,100 |  |  | $ | 97,100 |
Deferred loan costs related to mortgage loans |  | (167 | ) |  | (174 | )
Total Mortgages Payable |  | 96,933 |  |  | 96,926 |
Secured borrowing principal on SBA 7(a) loans sold for a premium and excess spread—variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 5.42% and 5.68% at March 31, 2020 and December 31, 2019, respectively. |  | 7,312 |  |  | 7,845 |
Secured borrowing principal on SBA 7(a) loans sold for excess spread—variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 3.07% and 3.32% at March 31, 2020 and December 31, 2019, respectively. |  | 2,826 |  |  | 4,307 |
|  | 10,138 |  |  | 12,152 |
Unamortized premiums |  | 582 |  |  | 629 |
Total Secured Borrowings—Government Guaranteed Loans |  | 10,720 |  |  | 12,781 |
Revolving credit facility |  | 159,500 |  |  | 153,000 |
SBA 7(a) loan-backed notes with a variable interest rate which resets monthly based on the lesser of the one-month LIBOR plus 1.40% or the prime rate less 1.08%, with payments of interest and principal due monthly. Balance due at maturity in March 20, 2043. |  | 18,033 |  |  | 22,282 |
Junior subordinated notes with a variable interest rate which resets quarterly based on the three-month LIBOR plus 3.25%, with quarterly interest only payments. Balance due at maturity on March 30, 2035. |  | 27,070 |  |  | 27,070 |
|  | 204,603 |  |  | 202,352 |
Deferred loan costs related to other debt |  | (2,608 | ) |  | (2,867 | )
Discount on junior subordinated notes |  | (1,749 | ) |  | (1,771 | )
Total Other Debt |  | 200,246 |  |  | 197,714 |
Total Debt |  | $ | 307,899 |  |  | $ | 307,421 |
The mortgages payable are secured by deeds of trust on certain of the properties and assignments of rents. The junior subordinated notes may be redeemed at par at our option. Secured borrowings—government guaranteed loans represent sold loans which are treated as secured borrowings because the loan sales did not meet the derecognition criteria provided for in ASC 860-30, Secured Borrowing and Collateral. These loans included cash premiums that are amortized as a reduction to interest expense over the life of the loan using the effective interest method and are fully amortized when the underlying loan is repaid in full. SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages. Deferred loan costs, which represent legal and third-party fees incurred in connection with our borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method. Deferred loan costs of $4,535,000 and $4,535,000 are presented net of accumulated amortization of $1,760,000 and $1,494,000 at March 31, 2020 and December 31, 2019, respectively, and are a reduction to total debt. In June 2016, we entered into six mortgage loan agreements with an aggregate principal amount of $392,000,000. A portion of the net proceeds from the loans was used to repay outstanding balances under our previous unsecured credit facility and the remaining portion was used to repurchase shares of our Common Stock in a private repurchase in September 2016. On September 21, 2017, in connection with the sale of an office property in Los Angeles, California, one mortgage loan with an outstanding principal balance of $21,700,000, collateralized by such property, was assumed by the buyer. On March 1, 2019, additional mortgage loans with an aggregate outstanding principal balance of $205,500,000 at such time, were legally defeased in connection with the sale of the related properties. The cash outlay required for this defeasance in the net amount of $224,086,000 was based on the purchase price of U.S. government securities that will generate sufficient cash flow to fund continued interest payments on the loans from the effective date of this defeasance through the date on which we could repay the loans at par. As a result of this defeasance, we recognized a loss on early extinguishment of debt of $19,290,000 for the three months ended March 31, 2019, which represented the sum of the difference between the purchase price of U.S. government securities of $224,086,000 and the aggregate outstanding principal balance of the mortgage loans of $205,500,000, the write-off of deferred loan costs of $637,000 and related accumulated amortization of $170,000, and transaction costs of $237,000. On March 14, 2019, in connection with the sale of an office property in San Francisco, California, one mortgage loan with an outstanding principal balance of $28,200,000 at such time was assumed by the buyer. As a result of this assumption, we recognized a loss on early extinguishment of debt of $178,000 for the three months ended March 31, 2019, which represented the write-off of deferred loan costs of $243,000 and related accumulated amortization of $65,000. On May 16, 2019, one mortgage loan with an outstanding principal balance of $39,500,000 at such time, was legally defeased in connection with the sale of the related property. The cash outlay required for this defeasance in the net amount of $44,108,000 was based on the purchase price of U.S. government securities that will generate sufficient cash flow to fund continued interest payments on the loan from the effective date of this defeasance through the date on which we could repay the loan at par. As a result of this defeasance, we recognized a loss on early extinguishment of debt of $4,911,000 for the year ended December 31, 2019, which represented the sum of the difference between the purchase price of U.S. government securities of $44,108,000 and the outstanding principal balance of the mortgage loan of $39,500,000, the write-off of deferred loan costs of $287,000 and related accumulated amortization of $82,000, and transaction costs of $98,000. On March 1, 2019, in connection with the sale of an office property in Washington, D.C., we prepaid the related mortgage loan with an outstanding principal balance of $46,000,000 at such time, using proceeds from the sale. As a result, we recognized a loss on early extinguishment of debt of $5,603,000 for the three months ended March 31, 2019, which represented a prepayment penalty of $5,325,000 and the write-off of deferred loan costs of $537,000 and related accumulated amortization of $259,000. On May 30, 2018, we completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $38,200,000 of unguaranteed SBA 7(a) loan-backed notes. The securitization uses a trust formed for the benefit of the note holders (the "Trust") which is considered a variable interest entity ("VIE"). Applying the consolidation requirements for VIEs under the accounting rules in ASC Topic 810, Consolidation, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits. The SBA 7(a) loan-backed notes are collateralized solely by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable. The SBA 7(a) loan-backed notes mature on March 20, 2043, with monthly payments due as payments on the collateralized loans are received. Based on the anticipated repayments of our collateralized SBA 7(a) loans, at issuance, we estimated the weighted average life of the SBA 7(a) loan-backed notes to be approximately two years. The SBA 7(a) loan-backed notes bear interest at the lower of the one-month LIBOR plus 1.40% or the prime rate less 1.08%. We reflect the SBA 7(a) loans receivable as assets on our consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on our consolidated balance sheets. The restricted cash on our consolidated balance sheets as of March 31, 2020 and December 31, 2019 included $1,725,000 and $3,306,000, respectively, of funds related to our SBA 7(a) loan-backed notes. In October 2018, CIM Commercial entered into a revolving credit facility with a bank syndicate pursuant to which CIM Commercial can borrow up to a maximum of $250,000,000, subject to a borrowing base calculation. The revolving credit facility is secured by deeds of trust on certain properties. Outstanding advances under the revolving credit facility bear interest at (i) the base rate plus 0.55% or (ii) LIBOR plus 1.55%. At March 31, 2020 and December 31, 2019, the variable interest rate was 2.41% and 3.29%, respectively. The interest rate on the first $120,000,000 of one-month LIBOR indexed variable rate borrowings on our revolving credit facility was effectively converted to a fixed rate of 3.11% through interest rate swaps until such swaps were terminated on March 11, 2019. The revolving credit facility is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions. On October 30, 2018, we borrowed $170,000,000 on this facility to repay outstanding borrowings on our unsecured term loan facility. On December 28, 2018, we repaid $40,000,000 of outstanding borrowings on our revolving credit facility and we terminated one interest rate swap with a notional value of $50,000,000 (Note 12). On February 28, 2019 and March 11, 2019, we repaid $10,000,000 and $120,000,000, respectively, of outstanding borrowings on our revolving credit facility using cash on hand and net proceeds from sales of assets in the first quarter of 2019 (Note 3), and, in connection with the March 11, 2019 repayment, we terminated our two remaining interest rate swaps, which had an aggregate notional value of $120,000,000 (Note 12). At March 31, 2020 and December 31, 2019, $159,500,000 and $153,000,000, respectively, was outstanding under the revolving credit facility, and approximately $64,900,000 and $73,900,000, respectively, was available for future borrowings. The revolving credit facility contains customary covenants and is not subject to any financial covenants, but is subject to a borrowing base calculation that determines the amount we can borrow. We are currently in discussions with the administrative agent of the revolving credit facility to modify the calculation of the borrowing base. There can be no assurance that we will be able to successfully negotiate a modification. If we are unable to amend the borrowing base calculation, we may have to repay a portion of the outstanding principal balance of the revolving credit facility as early as the second or third quarter of 2020. We do not, however, expect any such repayment, if it were to occur, to have a material adverse effect on our operations. At the beginning of May 2020, to further enhance its liquidity position and maintain financial flexibility, CIM Commercial entered into an unsecured revolving credit facility with a bank pursuant to which CIM Commercial can borrow up to a maximum of $10,000,000. Outstanding advances under the revolving credit facility bear interest at the rate of 1.00%. CIM Commercial also pays a revolving credit facility fee of 1.12% with each advance under the revolving credit facility, which fee is subject to a cap of $112,000 in the aggregate. The revolving credit facility matures in May 2022. The revolving credit facility contains customary covenants and is subject to a maximum leverage ratio and a minimum fixed charge coverage ratio, as well as certain other conditions. At March 31, 2020 and December 31, 2019, accrued interest and unused commitment fees payable of $671,000 and $650,000, respectively, are included in accounts payable and accrued expenses. Future principal payments on our debt (face value) at March 31, 2020 are as follows:
Years Ending December 31, |  | Mortgages Payable |  | Secured Borrowings Principal (1) |  | Other (1) (2) |  | Total
|  | (in thousands)
2020 (Nine months ending December 31, 2020) |  | $ | — |  |  | $ | 366 |  |  | $ | 536 |  |  | $ | 902 |
2021 |  | — |  |  | 502 |  |  | 1,092 |  |  | 1,594 |
2022 |  | — |  |  | 518 |  |  | 160,625 |  |  | 161,143 |
2023 |  | — |  |  | 535 |  |  | 1,340 |  |  | 1,875 |
2024 |  | — |  |  | 552 |  |  | 838 |  |  | 1,390 |
Thereafter |  | 97,100 |  |  | 7,665 |  |  | 40,172 |  |  | 144,937 |
|  | $ | 97,100 |  |  | $ | 10,138 |  |  | $ | 204,603 |  |  | $ | 311,841 |
(1) | Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans. Our estimate of their repayment is based on scheduled payments on the underlying loans. Our estimate will differ from actual amounts to the extent we experience prepayments and or loan liquidations or charge-offs. No payment is due unless payments are received from the borrowers on the underlying loans.
(2) | Represents the junior subordinated notes, SBA 7(a) loan-backed notes, and revolving credit facility.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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