Debt

12 Months Ended

Dec. 31, 2020

The following table presents debt as of December 31, 2020 and December 31, 2019 (dollars in thousands):


							December 31, 2020				December 31, 2019
	Capacity ($)		Recourse vs. Non-Recourse(1)	Final Maturity	Contractual Interest Rate		Principal Amount(2)		Carrying Value(2)		Principal Amount(2)		Carrying Value(2)

Securitization bonds payable, net
CLNC 2019-FL1(3)			Non-recourse	Aug-35	LIBOR + 1.59%		$	840,423	$	835,153	$	840,423	$	833,153
Subtotal securitization bonds payable, net							840,423		835,153		840,423		833,153

Mortgage and other notes payable, net
Net lease 6(4)			Non-recourse	Oct-27	4.45%		23,608		23,608		24,117		24,117
Net lease 5(5)			Non-recourse	Nov-26	4.45%		3,351		3,272		3,422		3,329
Net lease 4(5)			Non-recourse	Nov-26	4.45%		7,230		7,059		7,384		7,184
Net lease 3(5)			Non-recourse	Jun-21	4.00%		12,191		12,163		12,450		12,368
Net lease 6(5)			Non-recourse	Jul-23	LIBOR + 2.15%		1,364		1,333		1,658		1,615
Net lease 5(4)			Non-recourse	Aug-26	4.08%		31,244		31,004		31,821		31,539
Net lease 1(5)(6)			Non-recourse	Nov-26	4.45%		18,196		17,765		18,579		18,076
Net lease 1(7)			Non-recourse	Mar-28	4.38%		12,021		11,584		12,221		11,758
Net lease 4(4)(8)			Non-recourse	Apr-21	LIBOR + 2.50%		—		—		74,916		74,845
Net lease 1(4)			Non-recourse	Jul-25	4.31%		250,000		247,939		250,000		246,961
Net lease 2(4)(9)			Non-recourse	Jun-25	3.91%		187,151		189,806		181,952		184,532
Net lease 3(4)			Non-recourse	Sep-33	4.77%		200,000		198,604		200,000		198,521
Other real estate 4(5)(10)			Non-recourse	Dec-23	4.84%		—		—		42,925		43,407
Other real estate 2(5)(11)			Non-recourse	Dec-23	4.94%		—		—		42,443		42,851
Other real estate 8(5)(10)			Non-recourse	Jun-30	3.53%		—		—		15,819		16,324
Other real estate 10(5)(10)			Non-recourse	Jun-30	3.53%		—		—		11,744		11,939
Other real estate 9(5)(10)			Non-recourse	Nov-26	3.98%		—		—		23,885		23,133
Other real estate 1(5)			Non-recourse	Oct-24	4.47%		107,029		107,596		108,719		109,475
Other real estate 3(5)			Non-recourse	Jan-25	4.30%		73,905		73,341		75,256		74,554
Other real estate 5(5)(11)			Non-recourse	Apr-23	LIBOR + 4.00%		—		—		33,498		32,801
Other real estate 6(5)(12)			Non-recourse	Apr-24	LIBOR + 2.95%		22,788		22,306		21,500		20,825
Loan 9(13)			Non-recourse	Jun-24	LIBOR + 3.00%		75,377		75,377		65,958		65,958
Subtotal mortgage and other notes payable, net							1,025,455		1,022,757		1,260,267		1,256,112

Bank credit facility
Bank credit facility	$	450,000	Recourse	Feb-23 (14)	LIBOR + 2.25%		—		—		113,500		113,500
Subtotal bank credit facility							—		—		113,500		113,500

Master repurchase facilities
Bank 1 facility 3	$	400,000	Limited Recourse(15)	Apr-23(16)	LIBOR + 1.98%	(17)	112,509		112,509		106,309		106,309
Bank 2 facility 3(18)	21,353		Limited Recourse(15)	Oct-22	LIBOR + 2.50%	(17)	19,353		19,353		22,750		22,750
Bank 3 facility 3	600,000		Limited Recourse(15)	Apr-22(19)	LIBOR + 2.23%	(17)	196,738		196,738		265,633		265,633
Bank 7 facility 1	500,000		Limited Recourse(15)	Apr-22(20)	LIBOR + 2.05%	(17)	89,912		89,912		221,421		221,421
Bank 8 facility 1	250,000		Limited Recourse(15)	Jun-21(21)	LIBOR + 1.95%	(17)	116,712		116,712		164,098		164,098
Bank 9 facility 1	300,000		(22)	Nov-23(23)	(24)	(17)	—		—		—		—
Subtotal master repurchase facilities	$	2,071,353					535,224		535,224		780,211		780,211


						December 31, 2020				December 31, 2019
	Capacity ($)	Recourse vs. Non-Recourse(1)	Final Maturity	Contractual Interest Rate		Principal Amount(2)		Carrying Value(2)		Principal Amount(2)		Carrying Value(2)

CMBS credit facilities
Bank 1 facility 1		Recourse	(25)	NA	(26)	—		—		20,375		20,375
Bank 1 facility 2		Recourse	(25)	NA	(26)	—		—		18,834		18,834
Bank 3 facility		Recourse	(25)	NA	(26)	—		—		—		—
Bank 4 facility		Recourse	(25)	NA	(26)	—		—		—		—
Bank 5 facility 1		Recourse	(25)	NA	(26)	—		—		—		—
Bank 5 facility 2		Recourse	(25)	NA	(26)	—		—		—		—
Bank 6 facility 1		Recourse	(25)	NA	(26)	—		—		83,584		83,584
Bank 6 facility 2		Recourse	(25)	NA	(26)	—		—		82,729		82,729
Subtotal CMBS credit facilities						—		—		205,522		205,522
Subtotal credit facilities						535,224		535,224		1,099,233		1,099,233

Total						$	2,401,102	$	2,393,134	$	3,199,923	$	3,188,498

_________________________________________

(1)Subject to customary non-recourse carveouts.

(2)Difference between principal amount and carrying value of securitization bonds payable, net and mortgage and other notes payable, net is attributable to deferred financing costs, net and premium/discount on mortgage notes payable.

(3)The Company, through indirect Cayman subsidiaries, securitized commercial mortgage loans originated by the Company. Senior notes issued by the securitization trusts were generally sold to third parties and subordinated notes retained by the Company. These securitizations are accounted for as secured financing with the underlying mortgage loans pledged as collateral. Principal payments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities on the notes. Underlying collateral loans have initial terms of two to three years.

(4)Represents a mortgage note collateralized by an investment in the Company’s Core Portfolio.

(5)Represents a mortgage note collateralized by an investment in the Company’s Legacy, Non-Strategic Portfolio.

(6)Payment terms are periodic payment of principal and interest for debt on two properties and periodic payment of interest only with principal at maturity (except for principal repayments to release collateral properties disposed) for debt on one property.

(7)Represents a mortgage note collateralized by three properties in the Company’s Legacy, Non-Strategic Portfolio.

(8)Represents a mortgage note that was repaid during the third quarter of 2020 in connection with the sale of the collateralized property.

(9)As of December 31, 2020, the outstanding principal of the mortgage payable was NOK 1.6 billion, which translated to $187.2 million.

(10)During the fourth quarter of 2020, the Company sold its interest in the joint ventures and subsequently deconsolidated the joint ventures.

(11)Represents a mortgage note that was repaid during the first quarter of 2020 in connection with the sale of the collateralized properties.

(12)The current maturity of the mortgage payable is April 2022, with two one-year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.

(13)The current maturity of the note payable is June 2021, with three one-year extensions available at the Company’s option, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents. The loan is included in the Company’s Core Portfolio.

(14)The ability to borrow additional amounts terminates on February 1, 2022 at which time the Company may, at its election, extend the termination date for two additional six-month terms.

(15)Recourse solely with respect to 25.0% of the financed amount.

(16)The next maturity date is April 2021, with two one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.

(17)Represents the weighted average spread as of December 31, 2020. The contractual interest rate depends upon asset type and characteristics and ranges from one-month London Interbank Offered Rates (“LIBOR”) plus 1.50% to 2.60%.

(18)During the fourth quarter, the Company entered into an agreement to extend the facility termination date to April 2021 and reduced the capacity of Bank 2 Facility 3 to $21.4 million.

(19)Subsequent to December 31, 2020, the Company entered into an agreement which provides for two one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.

(20)The next maturity date is April 2021. Subsequent to December 31, 2020, the Company extended the maturity date to April 2024.

(21)The next maturity date is June 2021, with a one-year extension available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.

(22)Recourse is either 25.0% or 50.0% depending on loan metrics.

(23)The next maturity date is November 2021, with two one-year extension options available, which may be subject to the satisfaction of certain customary conditions set forth in the governing documents.

(24)The interest rate will be determined by the lender in its sole discretion.

(25)The maturity dates on the CMBS Credit Facilities are dependent upon asset type and will typically range from one to six months.

(26)CMBS Credit Facilities are undrawn and fully available.

Future Minimum Principal Payments

The following table summarizes future scheduled minimum principal payments at December 31, 2020 based on initial maturity dates or extended maturity dates to the extent criteria are met and the extension option is at the borrower’s discretion (dollars in thousands):


	Total		Securitization Bonds Payable, Net		Mortgage Notes Payable, Net(1)		Credit Facilities
2021	$	131,317	$	—	$	14,604	$	116,713
2022	308,523		—		2,520		306,003
2023	115,073		—		2,565		112,508
2024	207,413		—		207,413		—
2025	1,353,808		840,423		513,385		—
2026 and thereafter	284,968				284,968		—
Total	$	2,401,102	$	840,423	$	1,025,455	$	535,224

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(1)Includes $262.2 million of future minimum principal payments related to assets held for sale.

Bank Credit Facility

On February 1, 2018, the Company, through subsidiaries, including the OP, entered into a credit agreement with several lenders to provide a revolving credit facility in the aggregate principal amount of up to $400.0 million (the “Bank Credit Facility”). On December 17, 2018, the aggregate amount of revolving commitments was increased to $525.0 million and on February 4, 2019, the aggregate amount of revolving commitments was increased to $560.0 million. On May 6, 2020 these commitments were reduced to $450.0 million. The Bank Credit Facility will mature on February 1, 2022, unless the OP elects to extend the maturity date for up to two additional six-month terms.

The maximum amount available for borrowing at any time under the Bank Credit Facility is limited to a borrowing base valuation of certain investment assets, with the valuation of such investment assets generally determined according to a percentage of adjusted net book value. At December 31, 2020, the borrowing base valuation was sufficient to support the borrowing of up to $128.2 million.

Advances under the Bank Credit Facility accrue interest at a per annum rate equal to, at the applicable borrower’s election, either a LIBOR rate plus a margin of 2.25%, or a base rate determined according to a prime rate or federal funds rate plus a margin of 1.25%. The Company pays a commitment fee of 0.25% or 0.35% per annum of the unused amount (0.35%) at December 31, 2020, depending upon the amount of facility utilization.

Substantially all material wholly owned subsidiaries of the Company guarantee the obligations of the Company and any other borrowers under the Bank Credit Facility. As security for the advances under the Bank Credit Facility, the Company pledged substantially all equity interests it owns and granted a security interest in deposit accounts in which the proceeds of investment asset distributions are maintained.

The Bank Credit Facility contains various affirmative and negative covenants including financial covenants that require the Company to maintain minimum tangible net worth, liquidity levels and financial ratios, as specified in the Bank Credit Facility. On May 6, 2020, the Company amended the Bank Credit Facility to, among other things, (i) reduce the minimum tangible net worth covenant to $1.5 billion, providing portfolio management flexibilities as a result of any disruptions in investments caused by COVID-19 or other factors; (ii) reduce the facility size to $450.0 million, (iii) limit dividends to an amount required to maintain REIT status or to avoid income tax and restrict stock repurchases, each for liquidity preservation purposes, and (iv) focus new investments on senior mortgages. At December 31, 2020, the Company was in compliance with all of the financial covenants.

Securitization Financing Transactions

Securitization bonds payable, net represent debt issued by securitization vehicles consolidated by the Company. Senior notes issued by these securitization trusts were generally sold to third parties and subordinated notes retained by the Company. Payments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities of the loans.

In October 2019, the Company executed a securitization transaction, through wholly-owned subsidiaries, CLNC 2019-FL1, Ltd. and CLNC 2019-FL1, LLC (collectively, “CLNC 2019-FL1”), which resulted in the sale of $840.4 million of investment grade notes. The securitization reflects an advance rate of 83.5% at a weighted average cost of funds of LIBOR plus 1.59%, and is collateralized by a pool of 21 senior loans originated by the Company.

CLNC 2019-FL1 includes a two-year reinvestment feature that allows us to contribute existing or newly originated loan investments in exchange for proceeds from repayments or repurchases of loans held in CLNC 2019-FL1, subject to the satisfaction of certain conditions set forth in the indenture. In addition to existing eligible loans available for reinvestment, the continued origination of securitization eligible loans is required to ensure that the Company reinvests the available proceeds within CLNC 2019-FL1.

Additionally, CLNC 2019-FL1 contains note protection tests that can be triggered as a result of contributed loan defaults, losses, and certain other events outlined in the indenture, beyond established thresholds. A note protection test failure that is not remedied can result in the redirection of interest proceeds from the below investment grade tranches to amortize the most senior outstanding tranche. While the Company continues to closely monitor all loan investments contributed to CLNC 2019-FL1, a deterioration in the performance of an underlying loan could negatively impact its liquidity position.

As of December 31, 2020, the Company had $1.0 billion carrying value of CRE debt investments financed with $840.4 million of securitization bonds payable, net.

Master Repurchase Facilities

As of December 31, 2020, the Company, through subsidiaries, had entered into repurchase agreements with multiple global financial institutions to provide an aggregate principal amount of up to $2.1 billion to finance the origination of first mortgage loans and senior loan participations secured by CRE debt investments (“Master Repurchase Facilities”). The Company agreed to guarantee certain obligations under the Master Repurchase Facilities, which contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of this type. The Master Repurchase Facilities act as revolving loan facilities that can be paid down as assets are repaid or sold and re-drawn upon for new investments. As of December 31, 2020, the Company was in compliance with all of its financial covenants under the Master Repurchase Facilities.

As of December 31, 2020, the Company had $862.8 million carrying value of CRE debt investments financed with $535.2 million under the master repurchase facilities.

On May 7, 2020, the Company amended all six of its Master Repurchase Facilities to reduce the minimum tangible net worth covenant consistent with the Bank Credit Facility. During the first quarter of 2020, the Company received and timely paid a margin call on a hospitality loan and made voluntarily paydowns on two other hospitality and one retail loan. The lender granted the Company a holiday from future margin calls for four months, and it obtained broader discretion to enter into permitted modifications with the borrowers on these three specific loans, if necessary.

In May 2020, the Company amended two of its Master Repurchase Facilities pursuant to which the Company reduced facility advances corresponding to ten senior mortgage loans financed under such facilities. The Company and its lender counterparties agreed to temporary modifications providing for margin holidays from future margin calls or buffers before further margin calls are possible, as well as providing additional protections before certain repurchase obligations may be triggered. The Company was also provided broader discretion to negotiate with its borrowers to implement certain modifications to the underlying loans during such period. These holiday periods expired in the fourth quarter of 2020. Additionally, during the third quarter and fourth quarter of 2020, the Company made voluntarily paydowns on a hospitality loan and a self-storage loan, respectively. In exchange for the paydown on the self-storage loan, the lender granted the Company a holiday from future margin calls for four months, and the Company obtained broader approval to enter into a permitted modification with the borrower.

CMBS Credit Facilities

As of December 31, 2020 the Company had entered into eight master repurchase agreements (collectively the “CMBS Credit Facilities”) to finance CMBS investments. The CMBS Credit Facilities are on a recourse basis and contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of this type. During the fourth quarter of 2020, the Company fully paid down its CMBS Credit Facilities.