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DEBT
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
DEBT
6. DEBT
The following table summarizes the debt balances as of September 30, 2021 and December 31, 2020, and the debt activity for the nine months ended September 30, 2021 (in thousands):
During the Nine Months Ended September 30, 2021
Balances as of December 31, 2020Debt Issuances & AssumptionsRepayments & ModificationsAccretion & (Amortization)Balances as of September 30, 2021
Mortgage Payable:
Outstanding Balance$97,100 $— $— $— $97,100 
Deferred loan costs — Mortgage Payable(147)— — 20 (127)
Total Mortgage Payable96,953 — — 20 96,973 
Secured Borrowings — Government Guaranteed Loans:
Outstanding Balance8,457 — (651)— 7,806 
Unamortized premiums457 — — (77)380 
Total Secured Borrowings — Government Guaranteed Loans8,914 — (651)(77)8,186 
Other Debt:
2018 revolving credit facility166,500 20,000 (111,500)— 75,000 
2020 unsecured revolving credit facility— — — — — 
Junior subordinated notes27,070 — — — 27,070 
SBA 7(a) loan-backed notes14,230 — (3,981)— 10,249 
Borrowed funds from the Federal Reserve through the Paycheck Protection Program Liquidity Facility14,484 10,396 (17,278)— 7,602 
Deferred loan costs — other debt(2,155)— 125 771 (1,259)
Discount on junior subordinated notes(1,683)— — 68 (1,615)
Total Other Debt218,446 30,396 (132,634)839 117,047 
Total Debt, Net$324,313 $30,396 $(133,285)$782 $222,206 
Mortgage Payable—The mortgage payable is secured by a deed of trust on a property and assignments of rents receivable. As of September 30, 2021, the Company’s mortgage payable had a fixed interest rate of 4.14% per annum, with monthly payments of interest only, due on July 1, 2026. The loan is nonrecourse.
Secured Borrowings-Government Guaranteed Loans—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. As of September 30, 2021, the Company’s secured borrowings-government guaranteed loans included $5.1 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 3.86%, and $2.7 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 1.56%.    
2018 Revolving Credit Facility—In October 2018, CIM Commercial entered into a secured revolving credit facility with a bank syndicate that, as amended, allows CIM Commercial to borrow up to $209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”). In September 2020, the 2018 revolving credit facility was amended (the “2018 Credit Facility Modification”) to remedy the effect that COVID-19 had on CIM Commercial’s ability to borrow under the 2018 revolving credit facility during the period from September 2, 2020 through August 14, 2021 (the “Deferral Period”). The 2018 revolving credit facility bears interest (i) during the Deferral Period at (A) the base rate plus 1.05% or (B) LIBOR plus 2.05%
and (ii) after the Deferral Period, at (A) the base rate plus 0.55% or (B) LIBOR plus 1.55%. As of September 30, 2021 and December 31, 2020, the variable interest rate was 2.13% and 2.20%, respectively. The 2018 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 2018 revolving credit facility is secured by deeds of trust on certain of the Company’s properties. The 2018 revolving credit facility contains customary covenants and is not subject to any financial covenants (though the amount the Company may borrow under the 2018 revolving credit facility is determined by a borrowing base calculation). The 2018 revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions. As of September 30, 2021 and December 31, 2020, $75.0 million and $166.5 million, respectively, was outstanding under the 2018 revolving credit facility, and approximately $91.0 million and $28.0 million, respectively, was available for future borrowings.
2020 Unsecured Revolving Credit Facility—In May 2020, to further enhance its liquidity position and maintain financial flexibility, CIM Commercial entered into an unsecured revolving credit facility with a bank (the “2020 unsecured revolving credit facility”) pursuant to which CIM Commercial can borrow up to a maximum of $10.0 million. Outstanding advances under the 2020 unsecured 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 2020 unsecured revolving credit facility, which fee is subject to a cap of $112,000 in the aggregate. The 2020 unsecured revolving credit facility contains certain customary covenants including a maximum leverage ratio and a minimum fixed charge coverage ratio, as well as certain other conditions. The 2020 unsecured revolving credit facility matures in May 2022. As of September 30, 2021, no amounts were outstanding under the 2020 unsecured revolving credit facility and $10.0 million was available for future borrowings.
Junior Subordinated Notes—The Company has 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. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at the Company’s option.
SBA 7(a) Loan-Backed Notes—SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages. On May 30, 2018, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $38.2 million of unguaranteed SBA 7(a) loan-backed notes. 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 the Company’s 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 the Company’s collateralized SBA 7(a) loans, at issuance, the Company 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%. The Company reflects the SBA 7(a) loans receivable as assets on its consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheets. The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes of $1.9 million and $1.2 million as of September 30, 2021 and December 31, 2020, respectively.
Paycheck Protection Program Liquidity Facility—In June 2020, the Company commenced borrowing funds from the Federal Reserve through the PPP Liquidity Facility (the “PPPLF”) to finance all the loans the Company originated under the PPP. Advances under the PPPLF carry an interest rate of 0.35%, are made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and are secured by loans made by the Company under the PPP. The PPPLF contains customary covenants but is not subject to any financial covenants. The maturity date of PPPLF borrowings is the same as the maturity date of the loans pledged to secure the extension of credit, generally two years. At maturity, both principal and accrued interest are due. The maturity date of a PPPLF borrowing will be accelerated if, among other things, the Company has been reimbursed by the SBA for a loan forgiveness (to the extent of the forgiveness), the Company has received payment from the SBA representing exercise of the loan guarantee or the Company has received payment from the underlying borrower (to the extent of the payment received). As of September 30, 2021, $7.6 million was outstanding under the PPPLF. As the PPP has ended, no new extensions of credit may be made under the PPPLF.
Deferred loan costs, which represent legal and third-party fees incurred in connection with the Company’s 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 are presented net of accumulated amortization and are a reduction to total debt.
As of September 30, 2021 and December 31, 2020, accrued interest and unused commitment fees payable of $529,000 and $564,000, respectively, were included in accounts payable and accrued expenses.
Future principal payments on the Company’s debt (face value) as of September 30, 2021 are as follows (in thousands):
Years Ending December 31,Mortgage Payable
Secured Borrowings Principal (1)
2018 Revolving Credit Facility
Other (1) (2)
Total
2021 (Three months ending December 31, 2021)$— $469 $— $1,206 $1,675 
2022— 412 75,000 2,436 77,848 
2023— 424 — 2,321 2,745 
2024— 437 — 2,443 2,880 
2025— 450 — 2,157 2,607 
Thereafter97,100 5,614 — 34,358 137,072 
$97,100 $7,806 $75,000 $44,921 $224,827 
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(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. The Company’s estimate of their repayment is based on scheduled payments on the underlying loans. The Company’s estimate will differ from actual amounts to the extent the Company experiences 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 borrowed funds from the Federal Reserve through the PPPLF.