Notes Payable And Other Borrowings
|9 Months Ended|
Sep. 30, 2021
|Notes Payable And Other Borrowings [Abstract]|
|Notes Payable And Other Borrowings||
9. Notes Payable and Other Borrowings
The table below sets forth information regarding the Company’s notes payable and other borrowings (dollars in thousands):
(1)The collateral is a blanket lien on Renin’s assets and the Company’s ownership interest in Renin.
(2)BBX Capital is guarantor of the note.
(3)The collateral is a blanket lien on LOC’s assets.
See Note 11 to the Company’s consolidated financial statements included in the 2020 Annual Report for additional information regarding the above listed notes payable and other borrowings.
Toronto-Dominion Bank (“TD Bank”) Term Loan and Revolving Line of Credit
In July 2021, Renin’s credit facility with TD Bank was amended effective June 30, 2021 to temporarily increase the availability under the revolving line of credit from $20.0 million to $24.0 million through December 31, 2021. In addition, the amendment to the credit facility temporarily increased the maximum total leverage ratio included in the financial covenants of the facility but prohibited Renin from making distributions to BBX Capital through July 1, 2022, at which time the leverage ratio and Renin’s ability to make distributions to the Company will revert to the requirements under the facility immediately prior to the amendment.
In November 2021, Renin’s credit facility with TD Bank was further amended effective September 30, 2021 to extend the prior increase in the availability under the revolving line of credit from $20.0 million to $24.0 million through December 31, 2022, at which time the availability under the line of credit will revert to $20.0 million and any amounts outstanding in excess of $20.0 million must be repaid by Renin. In addition, the November amendment to the credit facility i) waived the requirement for Renin to comply with the maximum total leverage ratio included in the financial covenants of the facility as of September 30, 2021 (but does not waive the requirement for any future period), ii) extended the prior increase in the maximum total leverage ratio through December 31, 2022, iii) modified the calculation of the maximum total leverage ratio, and iv) included an additional financial covenant related to Renin meeting certain minimum levels of specified operating results from November 2021 through December 2022. Further, the November amendment prohibits Renin from making distributions to BBX Capital through December 31, 2022. On January 1, 2023, the financial covenants under the facility and Renin’s ability to make distributions to the Company will revert to the requirements under the facility prior to the amendments in 2021.
Adverse events, including, but not limited to, i) the effects of the COVID-19 pandemic on Renin’s operations, ii) supply chain disruptions and the related impacts on shipping and product costs, iii) a potential adverse outcome of Renin’s ongoing dispute with a foreign supplier which would require Renin to settle the dispute in cash (as further described in Note 12), and iv) the loss of sales from one or more major customers, have impacted Renin’s ability to remain in compliance with the financial covenants under its credit facility with TD Bank. If Renin is unable to maintain compliance with its debt covenants or obtain waivers if it is not in compliance with such covenants, Renin will no longer be able to access its revolving line of credit, may have to repay all or a portion of its borrowings prior to the scheduled maturity date, and/or provide additional collateral for such borrowings, any of which would have a material adverse effect on the Company’s liquidity, financial position, and results of operations.
LOCS Credit Facility
In July 2021, BBX Sweet Holdings and certain of its subsidiaries, including Las Olas Confections and Snacks, entered into a credit agreement (the “LOCS Credit Facility”) with IberiaBank which provides for a revolving line of credit of up to $2.5 million that matures in July 2023. Amounts outstanding under the LOCS Credit Facility bear interest at the higher of the Wall Street Journal Prime Rate plus 50 basis points or 3.0% per annum, and the facility requires monthly payments of interest only, with any outstanding principal and accrued interest due at the maturity date. The LOCS Credit Facility is collateralized by a blanket lien on all of the assets of the borrowers under the facility and is guaranteed by BBX Capital. The facility contains certain financial covenants, including a minimum liquidity requirement for BBX Capital as guarantor under the facility and a requirement that the borrowers must maintain a zero balance on the facility for thirty consecutive days during each calendar year during the term of the facility.
In August 2021, BBX Sweet Holdings and certain of its subsidiaries, including The Hoffman Commercial Group, Inc., borrowed $1.4 million from IberiaBank and issued a note payable to IberiaBank (the “IberiaBank Note”). The proceeds of the note were used to repay the outstanding balance of the Centennial Bank Note. The IberiaBank Note is secured by land and buildings owned by The Hoffman Commercial Group, Inc. and is guaranteed by BBX Capital. The note requires monthly payments of principal and interest based upon a 25 year amortization schedule, with the entire unpaid principal balance and unpaid interest due in August 2031. The amounts outstanding under the note bear interest at a fixed interest rate of 3.5%. The facility contains certain financial covenants, including a minimum liquidity requirement for BBX Capital as guarantor under the note.
Community Development District Obligations
In November 2021, the Beacon Lakes Community Development District issued $5.1 million of bonds to partially fund the Phase 3 infrastructure improvements at the Beacon Lakes Community.
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.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef