Power REIT Debt Disclosure

5 – LONG-TERM DEBT

 

On November 6, 2015, PWRS borrowed $10,150,000 pursuant to a bond offering (the “PWRS Bonds”).

 

The PWRS Bonds PWRS Bonds are secured by land and intangibles owned by PWRS and have a total obligation of $10,150,000. The PWRS Bonds carry a fixed annual interest rate of 4.34% and matures in 2034. During 2015, the Trust capitalized approximately $441,000 of expenses related to the PWRS Bonds of which approximately $97,000 was paid in cash and approximately 344,000 was incurred through issuance of debt. This amount is amortized over the life of the PWRS Bonds. As of December 31, 2019 and 2018, the balance of the PWRS Bonds was approximately $8,538,000 (net of unamortized debt costs of approximately $325,000) and $8,870,000 (net of unamortized debt costs of approximately $348,000), respectively.

 

On July 5, 2013, PWSS borrowed $750,000 from a regional bank (the “PWSS Term Loan”) to refinance a bridge loan that had been extended by HBP in connection with PWSS’ acquisition of leased property in December 2012. The PWSS Term Loan carries a fixed interest rate of 5.0%, a term of 10-years and amortizes based on a twenty-year principal amortization schedule. In addition to being secured by PWSS’ real estate assets, the term loan is secured by a parent guarantee from the Trust. The balance of the PWSS Term Loan as of December 31, 2019 and December 31, 2018 is approximately $579,000 (net of approximately $9,500 of capitalized debt costs which are being amortized over the life of the financing) and $605,000 (net of approximately $12,000 of capitalized debt costs which are being amortized over the life of the financing), respectively.

  

On December 31, 2012, as part of the Salisbury land acquisition, PWSS assumed existing municipal financing (“Municipal Debt”). The Municipal Debt has approximately 12 years remaining. The Municipal Debt has a simple interest rate of 5.0% that is paid annually, with the next payment due February 1, 2019. The balance of the Municipal Debt as of December 31, 2019 and 2018 is approximately $77,000 and $83,000respectively.

 

On November 25, 2019, Power REIT, through a newly formed wholly owned subsidiary, completed a financing that is intended to provide capital for acquisition of additional properties on an accretive basis. The financing is in the form of long-term fixed rate bonds with gross proceeds of $15,500,000. The bonds carry a fixed interest rate of 4.62% and fully amortize over the life of the financing which matures in 2054 (35 years). The bonds are fully secured by the equity interest in Power REIT’s wholly owned subsidiary – PWV. The total debt issuance costs which will be amortized over the life of the financing is approximately $312,200. The balance of the loan as of December 31, 2019 is $15,168,600 (net of approximately $311,000 of capitalized debt costs).

 

The approximate amount of principal payments remaining on Power REIT’s long-term debt as of December 31, 2019 is described below:

 

		Total Debt
2020			598,256
2021			635,517
2022			675,390
2023			1,167,971
2024			715,778
Thereafter			21,215,114
Long term debt			25,008,026