| Schedule of Long-Term Debt Instruments |
Our debt consisted of the following at September 30, 2020: | | | | | | | September 30, 2020 | | Debt, excluding Timber Funds: | | Term Credit Agreement borrowings due 2028 at a variable interest rate of 1.8% at September 30, 2020 (a) | $350,000 | | Senior Notes due 2022 at a fixed interest rate of 3.75% | 325,000 | | Incremental Term Loan Agreement borrowings due 2026 at a variable interest rate of 2.1% at September 30, 2020 (b) | 300,000 | | 2020 Incremental Term Loan Facility borrowings due 2025 at a variable interest rate of 2.0% at September 30, 2020 (c) | 250,000 | | Revolving Credit Facility borrowings due 2025 at an average variable interest rate of 1.7% at September 30, 2020 | 20,000 | | New Zealand subsidiary noncontrolling interest shareholder loan due 2025 at a fixed interest rate of 2.95% | 22,735 | | | Northwest Farm Credit Services Credit Facility with quarterly interest-only payments, collateralized by Core Timberlands, with the following tranches (d) | | Due 2025 at a fixed interest rate of 6.1% | 11,690 | | Due 2028 at a fixed interest rate of 4.1% | 12,052 | | Due 2033 at a fixed interest rate of 5.3% | 19,497 | | Due 2036 at a fixed interest rate of 5.4% | 9,898 | | | Total debt, excluding Timber Funds | 1,320,872 | | | Less: Deferred financing costs, excluding Timber Funds | (2,667) | | | Long-term debt, net of deferred financing costs, excluding Timber Funds | 1,318,205 | | | | | | | Debt, Timber Funds: | | Fund II Mortgages Payable, collateralized by Fund II timberlands with quarterly interest
payments, as follows: (d) | | Due 2022 at a fixed interest rate of 2.0% (e) | 11,000 | | Due 2022 at a fixed interest rate of 2.0% (e) | 14,000 | | Fund III Mortgages Payable, collateralized by Fund III timberlands with quarterly interest
payments, as follows (d): | | Due 2023 at a fixed interest rate of 5.1% | 19,695 | | Due 2024 at a fixed interest rate of 4.5% | 15,708 | | | Total debt, Timber Funds | 60,403 | | | Less: Deferred financing costs, Timber Funds | (12) | | | Long-term debt, net of deferred financing costs, Timber Funds | 60,391 | | | | | | | | | Long-term debt, net of deferred financing costs | $1,378,596 | |
(a) As of September 30, 2020, the periodic interest rate on the term credit agreement (the “Term Credit Agreement”) was LIBOR plus 1.600%. We estimate the effective fixed interest rate on the term loan facility to be approximately 3.2% after consideration of interest rate swaps and estimated patronage refunds. (b) As of September 30, 2020, the periodic interest rate on the incremental term loan (the “Incremental Term Loan Agreement”) was LIBOR plus 1.900%. We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 2.8% after consideration of interest rate swaps and estimated patronage refunds. (c) As of September 30, 2020, the periodic interest rate on the 2020 incremental term loan (the “2020 Incremental Term Loan Facility”) was LIBOR plus 1.850%. We estimate the effective fixed interest rate on the incremental term loan facility to be approximately 2.3% after consideration of interest rate swaps and estimated patronage refunds. (d) See the section below labeled “Long-Term Debt Assumed in the Pope Resources Merger” for additional details. (e) Beginning January 1, 2021, this will transition from a fixed to a variable interest rate of 3-month LIBOR plus 1.700%.
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| Schedule of Maturities of Long-Term Debt |
Principal payments due during the next five years and thereafter are as follows: | | | | | | | | | | | | | Excluding Timber Funds | Timber Funds | Total | | 2020 | — | | — | | — | | | 2021 | — | | — | | — | | | 2022 | 325,000 | | 25,000 | | 350,000 | | | 2023 | — | | 17,980 | | 17,980 | | | 2024 | — | | 14,400 | | 14,400 | | | Thereafter | 987,735 | | — | | 987,735 | | | Total Debt | $1,312,735 | | $57,380 | | $1,370,115 | |
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| Schedule of Credit Facilities |
The pertinent details of each tranche of the NWFCS Credit Facility we assumed are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Tranche | Stated Fixed Interest Rate | | Effective Fixed Interest Rate (a) | | Stated Principal Amount | | Est. Fair Value at Merger Date (b) | | Tranche 2 (Due 2025) | 6.1 | % | | 4.8 | % | | $10,000 | | | $11,838 | | | Tranche 4 (Due 2028) | 4.1 | % | | 3.1 | % | | 11,000 | | | 12,108 | | | Tranches 6 & 7 (Due 2033) | 5.3 | % | | 4.2 | % | | 16,000 | | | 19,609 | | | Tranche 8 (Due 2036) | 5.4 | % | | 4.3 | % | | 8,000 | | | 9,947 | | | Total NWFCS Credit Facility assumed | | | | | $45,000 | | | $53,502 | |
(a)Estimated effective fixed interest rates as of September 30, 2020 after consideration of estimated patronage refunds. (b)The fair market value premium will be amortized as a benefit to interest expense over the maturity term of each tranche.
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| Schedule of Mortgages Payable |
The pertinent details of the Fund II Mortgages Payable are as follows: | | | | | | | | | | | | | | | | | | | | | | Maturity Date | | Stated Fixed Interest Rate (a) | | Stated Principal Amount | | Est. Fair Value at Merger Date (b) | | September 2022 | | 2.0 | % | | $11,000 | | | $11,061 | | | September 2022 | | 2.0 | % | | 14,000 | | | 14,023 | | | | | | $25,000 | | | $25,084 | |
(a)Beginning January 1, 2021, this will transition from a fixed to a variable interest rate of 3-month LIBOR plus 1.700%. (b)The fair market value premium has been amortized as a benefit to interest expense over the original maturity term of each mortgage. The pertinent details of the Fund III Mortgages Payable are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Maturity Date | | Stated Fixed Interest Rate | | Effective Fixed Interest Rate (a) | | Stated Principal Amount | | Est. Fair Value at Merger Date (b) | | December 2023 | | 5.1 | % | | 3.9 | % | | $17,980 | | | $19,915 | | | October 2024 | | 4.5 | % | | 3.2 | % | | 14,400 | | | 15,844 | | | | | | | | $32,380 | | | $35,759 | |
(a)Estimated effective fixed interest rates as of September 30, 2020 after consideration of estimated patronage refunds. (b)The fair market value premium will be amortized as a benefit to interest expense over the maturity term of each mortgage.
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| Schedule of Debt Covenants |
The covenants listed below, which are the most significant financial covenants in effect as of September 30, 2020, are calculated on a trailing 12-month basis: | | | | | | | | | | | | | | | | | | | Covenant Requirement | | Actual Ratio | | Favorable | | Covenant EBITDA to consolidated interest expense should not be less than | 2.5 to 1 | | 9.42 to 1 | | 6.92 | | Covenant debt to covenant net worth plus covenant debt shall not exceed | 65 | % | | 48 | % | | 17 | % |
The covenants listed below, which are the most significant financial covenants in effect as of September 30, 2020, are calculated on a trailing 12-month basis: | | | | | | | | | | | | | | | | | | | Covenant Requirement | | Actual Ratio | | Favorable | | Covenant loan-to-appraised value shall not exceed | 50% | | 11% | | 39 | % | | Covenant EBITDA to consolidated interest expense should not be less than | 2.5 to 1 | | 9.42 to 1 | | 6.92 | | Covenant debt to covenant net worth plus covenant debt shall not exceed | 65 | % | | 48 | % | | 17 | % |
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