THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2017 and 2016
As of December 31, 2017, and 2016, all other mortgage notes payable are solely collateralized by the respective rental properties owned by the affiliated entities responsible for each mortgage. NHPF has provided no underlying guarantees on other mortgage notes, other than standard guarantees for fraud and other “bad boy“ acts. Principal and interest are payable monthly on all mortgage notes except those financed with tax-exempt bonds. On tax-exempt bond financing, the bond payments are made in accordance with the various bond agreements. All loan agreements require various periodic escrow deposits for taxes, insurance and replacement of property assets.
Total principal payments on mortgage notes are due as follows:
Year ending December 31,
Total
2018 2019 2020 2021 2022
$
38,863,009 9,203,062 11,005,599 2,872,840 3,009,698 296,570,224
Thereafter
$
361,524,432
For the years ended December 31, 2017 and 2016, total interest costs of $10,308,928 and $7,872,791, respectively, were incurred, of which $151,171 and $0, respectively, were capitalized and $10,157,757 and $7,872,791, respectively, were expensed. For the years ended December 31, 2017 and 2016, amortization of debt issuance costs of $777,252 and $757,991, respectively, were included in total interest costs expensed. For the years ended December 31, 2017 and 2016, the unrealized gains on the interest rate liability of $248,448 and $878,170, respectively, were included in total interest costs expensed. Debt issuance costs, net of accumulated amortization, as of December 31, 2017 and 2016, totaled $9,426,003 and $6,824,687, respectively, and are related to the mortgage notes payable. Amortization of the debt issuance costs on the above notes results in an effective yield between 2.67% and 8.40%. Interest Rate Swap Contracts To manage risk and the economic impact related to interest rate movements on loans funded with variable rate tax-exempt bonds, three affiliated entities, Asmara, Foxwood Preservation and St. Luke’s Preservation, have entered into swap contracts. Under the Asmara contract, Asmara paid a fixed interest rate of 1.6495% per annum and received a floating interest rate based on the USD- SIFMA Municipal Swap Index (0.72% as of December 31, 2016). During 2017, the swap matured and the properties were sold to an unrelated third party. Under Foxwood Preservation’s contract, Foxwood Preservation pays a fixed interest rate of 3.81% per annum and receives a floating rate based on the USD-SIFMA Municipal Swap Index (1.22% and 0.64% at December 31, 2017 and 2016, respectively). This swap matures on December 1, 2025. Under the St. Luke’s Preservation
- 35 -
Powered by FlippingBook