FrontView REIT Inc

6. DEBT, NET

As of September 30, 2024 and December 31, 2023, the weighted average interest rate was 4.96% and 5.17%, respectively.

The aggregate principal repayment of the Partnership’s debt, excluding the unamortized financing transaction and discount costs of $1,198, due in each of the years under the remaining term, are as follows:

(a) Asset Backed Securities (“ABS Notes”)

On December 9, 2019, the Partnership and the Joint Venture issued 3.37% Series 2019-1, Class A (rated by Standard & Poors and Kroll Bond Rating Agency) Net-Lease Mortgage Notes (the “ABS Notes”) for gross proceeds of $192,935 and $71,065, respectively, pursuant to the Master Indenture Agreement, among the 95 and 40 properties directly or indirectly owned, as of that date, by the Partnership and Joint Venture, respectively (collectively, the “Issuers”), and the Indenture Trustee. On October 20, 2023, the Partnership acquired the remaining 50% interest in the Joint Venture held by the JV Partner and assumed debt at fair value of $66,907, net of a discount of $2,824.

As of September 30, 2024, the ABS Notes are secured by 130 Issuers consisting of 132 properties directly owned by the Partnership having a carrying value of $310,635, an assignment of leases and rents and are guaranteed by the Partnership in the aggregate.

The anticipated repayment date for the ABS Notes is December 2024 even though the stated maturity date is December 2049 because the remaining outstanding principal balance becomes due and payable and additional interest begins to accrue on the ABS Notes if not paid in full by December 2024. Payments of interest and scheduled payments of principal of $110 on the ABS Notes are payable to the holders of the ABS Notes on the 28th day of each month beginning in January 2020. The ABS Notes can be prepaid in whole, or in part, by the Issuers on any day at a price equal to: (1) the outstanding principal amount of the ABS Notes to be prepaid; (2) all accrued and unpaid interest owing as of that date; and (3) all amounts related to such ABS Notes that are outstanding to the Indenture Trustee and the other parties to the transaction documents as of that date. The Partnership maintains a segregated trust account established by the Indenture Trustee to reserve $1,050 required to be paid for maintenance and repair obligations under certain net leases.

For the three months ended September 30, 2024 and 2023, amortization of financing transaction costs recorded by the Partnership were $317 and $317 respectively. For thenine months ended September 30, 2024 and 2023, amortization of financing transaction costs recorded by the Partnership were $943 and $940, respectively. For thethree and nine months ended September 30, 2024, amortization of discount costs recorded by the Partnership were $602 and $1,779 respectively.

In accordance with the Master Indenture Agreement, the Issuers in aggregate are required to maintain a monthly debt service coverage ratio of at least 1.25x. As of September 30, 2024, the Issuers were in compliance with this requirement.

In accordance with the private placement memorandum associated with the ABS Notes, all receipts of cash are held in trust by the Partnership for the Issuers and the Indenture Trustee to satisfy the conditions of the ABS Notes. On a monthly basis, the cash receipts pertaining to any Issuers are deposited to the bank account held by the Partnership and then the total cash receipts as of the 20th of every month are swept into a payment account controlled by the Indenture Trustee. The excess cash from each monthly payment after debt service costs is transferred back to the Partnership’s operating account.

(b) CIBC Bank USA Credit Facility

On March 8, 2021, the Partnership entered into a credit facility agreement with CIBC Bank USA, which provides for a secured revolving line of credit of $65,000 (the “Revolving Credit Facility”). The Revolving Credit Facility has athree-year term expiring on March 8, 2024, withtwo one-year extensions. On March 8, 2024 the Partnership exercised its option to extend the term for one year to mature on March 8, 2025. The extension is in management’s control as the Partnership is compliant with the required covenants and can pay the extension fee. The Revolving Credit Facility bears interest at a rate equal to LIBOR subject to a floor of 0.25% plus 2.25%. Interest only payments are due until maturity. The Revolving Credit Facility is also subject to an unused commitment fee equal to (1)0.25% of the unused loan amount if utilization is less than 50% of the Revolving Credit Facility or (2)0.15% of the unused loan amount if the utilization is greater than or equal to 50% of the Revolving Credit Facility. The unused commitment fee is payable quarterly in arrears on the first day of each calendar quarter and is included in interest expense on the accompanying condensed consolidated statements of operations.

On July 31, 2021, the Revolving Credit Facility was amended to increase the maximum commitment under the revolving line of credit to $202,500. In addition, Montgomery Bank, OceanFirst Bank N.A., Hancock Whitney Bank, Bank of Blue Valley, South State Bank N.A. and Woodforest National Bank were added as additional lenders under the Revolving Credit Facility.

On March 17, 2023, the Partnership amended the credit agreement for the Revolving Credit Facility to replace U.S. dollar LIBOR with the Term Secured Overnight Financing Rate (“Term SOFR”) plus an adjustment of 0.11% as of March 17, 2023. Under this amendment, the loan bears interest at a rate equal to Adjusted Term SOFR plus 2.25%.

The Revolving Credit Facility is secured by certain of the Partnership’s properties having a carrying value of $349,328 and an assignment of rents and leases. The Partnership is required to maintain minimum liquidity reserves of no less than the greater of: (1) $4,000 and (2) an amount equal to 4% of the principal amount outstanding under the Revolving Credit Facility, but up to a maximum of $8,000 pursuant to the terms of its guarantee.

For the three months ended September 30, 2024 and 2023, the Partnership recorded amortization of financing transaction costs of $134 and $291, respectively, relating to the Revolving Credit Facility. For thenine months ended September 30, 2024 and 2023, the Partnership recorded amortization of financing transaction costs of $423 and $834, respectively, relating to the Revolving Credit Facility.

(c) CIBC Bank USA Term Loan

On October 20, 2023, the Partnership purchased the remaining 50% interest in the Joint Venture from the Joint Venture Partner. The Partnership assumed a loan (the “Term Loan”) with CIBC Bank USA, which provides for a secured loan of $17,000. The Term Loan has a maturity date of March 31, 2027 and bears interest at a rate equal to Term SOFR plus 1.80%. The Term Loan is secured by certain of the Partnership's properties having a carrying value of $26,703 and an assignment of rents and leases.

On April 10, 2024, the Partnership sold a property secured under the Term Loan for $1,157. The Partnership received net proceeds of $1,033 after paying closing costs of $118 and proration adjustments of $6. The net proceeds were used to repay the Term Loan.