SAUL CENTERS, INC.BFS
SAUL CENTERS, INC. Debt Disclosure
Notes Payable, Bank Credit Facility, Interest and Amortization of Deferred Debt Costs
The principal amount of outstanding debt totaled $1.63 billion at December 31, 2025, of which $1.44 billion was fixed rate debt and $189.0 million was variable rate debt outstanding under the Credit Facility.
The principal amount of the Company’s outstanding debt totaled $1.55 billion at December 31, 2024, of which $1.37 billion was fixed rate debt and $187.0 million was variable rate debt outstanding under the Existing Credit Facility.
On July 30, 2025, the Company refinanced its existing $525.0 million (the “Existing Credit Facility”) comprised of a $425.0 million revolving credit facility (the “Existing Revolving Credit Facility”) and a $100.0 million term loan (the “Existing Term Loan”). The Company’s new $600.0 million credit facility (the "New Credit Facility") is comprised of a $460.0 million revolving credit facility (the "New Revolving Credit Facility") and a $140.0 million term loan (the " New Term Loan"). Except as set forth in the summary below, the terms of the New Credit Facility are substantially the same as the terms of the Existing Credit Facility.
| (Dollars in thousands) | New Credit Facility | Existing Credit Facility | |||||||||||||||||||||
| New Term Loan | New Revolving Credit Facility | Total | Existing Term Loan | Existing Revolving Credit Facility | Total | ||||||||||||||||||
| Facility Size | $ | 140,000 | $ | 460,000 | $ | 600,000 | $ | 100,000 | $ | 425,000 | $ | 525,000 | |||||||||||
| Maturity | July 28, 2028 | July 30, 2029 | February 26, 2027 | August 29, 2025 | |||||||||||||||||||
| Extension | Two for one year each | One for one year | None | One for one year | |||||||||||||||||||
| Interest Rate | SOFR | SOFR | SOFR+0.10% | SOFR+0.10% | |||||||||||||||||||
| Spread | 1.30% to 1.90% | 1.35% to 1.95% | 1.30% to 1.90% | 1.35% to 1.95% | |||||||||||||||||||
| Issue Letters of Credit | Yes | Yes | |||||||||||||||||||||
| Guarantee | Saul Centers and certain subsidiaries of the Operating Partnership | Saul Centers and certain subsidiaries of the Operating Partnership | |||||||||||||||||||||
On December 31, 2025, based on the value of the Company’s unencumbered properties calculated in accordance with the terms of the New Credit Facility, approximately $96.2 million was available under the New Credit Facility, $289.0 million was outstanding and approximately $185,000 was committed for letters of credit. As of December 31, 2025, the applicable spread for borrowings was 140 basis points related to the New Revolving Credit Facility and 135 basis points related to the New Term Loan.
On December 31, 2024, based on the value of the Company's unencumbered properties calculated in accordance with the terms of the Existing Credit Facility, approximately $134.5 million was available and undrawn under the Existing Credit Facility, $287.0 million was outstanding and approximately $185,000 was committed for letters of credit. As of December 31, 2024, the applicable spread for borrowings was 140 basis points related to the Existing Revolving Credit Facility and 135 basis points related to the Existing Term Loan.
On August 23, 2022, the Company entered into two floating-to-fixed interest rate swap agreements to manage the interest rate risk associated with $100.0 million of its variable-rate debt. Each swap agreement became effective October 3, 2022 and each has a $50.0 million notional amount. One agreement terminates on October 1, 2027 and effectively fixes SOFR at 2.96%. The other agreement terminates on October 1, 2030 and effectively fixes SOFR at 2.91%. Because the interest-rate swaps effectively fix SOFR for $100.0 million of variable-rate debt, unless otherwise indicated, $100.0 million of variable-rate debt is treated as fixed-rate debt for disclosure purposes. The Company has designated the agreements as cash flow hedges for accounting purposes.
As of December 31, 2025 and 2024, the fair value of the interest-rate swaps totaled approximately $1.4 million and $4.1 million, respectively, and is included in Other assets in the Consolidated Balance Sheets. The increase in value from inception of the swaps is reflected in Other Comprehensive Income in the Consolidated Statements of Comprehensive Income.
On December 17, 2025, the Company closed on a 15-year, non-recourse, $46.0 million mortgage secured by Lansdowne Town Center. The loan matures in 2041, bears interest at a fixed-rate of 5.74%, requires monthly principal and interest payments of $289,100 based on a 25-year amortization schedule and requires a final payment of $26.6 million at maturity. Proceeds were used to reduce the outstanding balance of the New Credit Facility.
On December 15, 2025, the Company closed on a 14-year, non-recourse, $15.0 million mortgage secured by Ravenwood. The loan matures in 2040, bears interest at a fixed-rate of 5.58%, requires monthly principal and interest payments of $92,800 based on a 25-year amortization schedule and requires a final payment of $9.2 million at maturity. Proceeds were used to repay the remaining balance of approximately $10.0 million on the existing mortgage and reduce the outstanding balance of the New Credit Facility.
On December 18, 2024, the Company closed on a 15-year, non-recourse, $50.0 million mortgage secured by Ashburn Village Shopping Center. The loan matures in 2040, bears interest at a fixed-rate of 5.47%, requires monthly principal and interest payments of $306,100 based on a 25-year amortization schedule and requires a final principal payment of $28.4 million at maturity. Proceeds were used to repay the remaining balance of approximately $20.5 million on the existing mortgage and reduce the outstanding balance of the Company’s Existing Credit Facility.
On September 24, 2024, the Company closed on a 15-year, $70.0 million mortgage secured by Thruway Shopping Center. The loan matures in 2039, bears interest at a fixed-rate of 6.41%, requires monthly principal and interest payments of $468,700 based on a 25-year amortization schedule and requires a final principal payment of $41.7 million at maturity. Proceeds were used to reduce the outstanding balance of the Company’s Existing Credit Facility.
On May 28, 2024, the Company closed on a 13.4-year, non-recourse, $100.0 million mortgage secured by Avenel Business Park, Leesburg Pike Plaza, and White Oak Shopping Center. The loan matures in 2037, bears interest at a fixed-rate of 6.38%, requires monthly principal and interest payments of $686,300 based on a amortization schedule and requires a final principal payment of $61.5 million at maturity. Proceeds were used to repay the remaining balance of approximately $51.2 million on the existing mortgages secured by the properties and reduce the outstanding balance of the Company’s Existing Credit Facility. The loan is cross-collateralized and coterminous with the mortgage secured by Beacon Center and Seven Corners Center.
On March 8, 2023, the Company closed on a 10-year, non-recourse, $15.3 million mortgage secured by BJ’s Wholesale Club in Alexandria, Virginia. The loan matures in 2033, bears interest at a fixed-rate of 6.07%, requires monthly principal and interest payments of $99,200 based on a 25-year amortization schedule and requires a final principal payment of $11.7 million at maturity. Proceeds were used to repay the remaining balance of approximately $9.3 million on the existing mortgage and reduce the outstanding balance of the Company’s Existing Credit Facility.
On February 23, 2022, the Company closed on a $133.0 million construction-to-permanent loan, the proceeds of which are being used to partially fund Hampden House. The loan matures in 2040, bears interest at a fixed rate of 3.90%, and requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in 2026, and thereafter, monthly principal and interest payments based on a 25-year amortization schedule will be required. As of December 31, 2025, the balance of the loan was $115.4 million, net of unamortized deferred debt costs.
On November 19, 2021, the Company closed on a $145.0 million construction-to-permanent loan, the proceeds of which are being used to partially fund Twinbrook Quarter Phase I. The loan matures in 2041, bears interest at a fixed rate of 3.83%, and requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2026 and, thereafter, monthly principal and interest payments based on a 25-year amortization schedule will be required. As of December 31, 2025, the balance of the loan was $139.3 million, net of unamortized deferred debt costs.
Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the New Credit Facility. The Operating Partnership is the guarantor of a portion of the Thruway mortgage (totaling $17.5 million of the $68.6 million outstanding balance at December 31, 2025).
The Company provides a repayment guaranty of 100% of the loan secured by Twinbrook Quarter during construction and lease-up. Such guaranty is expected to be reduced in the future as the development achieves certain metrics. As of December 31, 2025, the loan balance and the amount guaranteed were $141.6 million. The Company also provides the lender with a 100% construction completion guaranty.
The Company provides a limited repayment guaranty of $26.6 million during construction and lease-up for the loan secured by Hampden House. Such guaranty is expected to be reduced in the future as the development achieves certain metrics. As of December 31, 2025, the loan balance was $117.9 million. The Company also provides the lender with a 100% construction completion guaranty.
All other notes payable are non-recourse.
The carrying amount of the properties collateralizing the mortgage notes payable totaled $1.6 billion and $1.6 billion, as of December 31, 2025 and 2024, respectively. The Company’s New Credit Facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. The Company was in compliance as of December 31, 2025.
•limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);
•limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and
•limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).
Mortgage notes payable totaling $2.0 million at each of December 31, 2025 and 2024, are guaranteed by a member of the Saul Organization.
As of December 31, 2025, the scheduled maturities of all debt including scheduled principal amortization for years ended December 31 are as follows:
| (In thousands) | Balloon Payments | Scheduled Principal Amortization | Total | ||||||||||||||
| 2026 | $ | 134,088 | $ | 24,202 | $ | 158,290 | |||||||||||
| 2027 | — | 35,654 | 35,654 | ||||||||||||||
| 2028 | 157,811 | (1) | 36,809 | 194,620 | |||||||||||||
| 2029 | 174,514 | (2) | 37,496 | 212,010 | |||||||||||||
| 2030 | 23,781 | 37,002 | 60,783 | ||||||||||||||
| Thereafter | 667,177 | 297,284 | 964,461 | ||||||||||||||
| Principal amount | $ | 1,157,371 | $ | 468,447 | 1,625,818 | ||||||||||||
| Unamortized deferred debt costs | 24,016 | ||||||||||||||||
| Net | $ | 1,601,802 | |||||||||||||||
(1)Includes $140.0 million outstanding under the New Term Loan. (2)Includes $149.0 million outstanding under the New Revolving Credit Facility | |||||||||||||||||
Deferred Debt Costs
Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the New Credit Facility. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaled $24.0 million and $20.1 million, net of accumulated amortization of $9.9 million and $11.2 million at December 31, 2025 and 2024, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.
The components of interest expense are set forth below.
| Year ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Interest incurred | $ | 77,001 | $ | 74,359 | $ | 66,717 | |||||||||||
| Amortization of deferred debt costs | 2,961 | 2,353 | 2,250 | ||||||||||||||
| Capitalized interest | (9,255) | (22,857) | (19,519) | ||||||||||||||
| Interest expense | 70,707 | 53,855 | 49,448 | ||||||||||||||
| Less: Interest income | (159) | (159) | (295) | ||||||||||||||
| Interest expense, net and amortization of deferred debt costs | $ | 70,548 | $ | 53,696 | $ | 49,153 | |||||||||||
Deferred debt costs capitalized during the years ended December 31, 2025, 2024 and 2023 totaled $7.0 million, $3.5 million and $0.4 million, respectively.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.