COPT Defense Properties Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Investing Receivables

Investing Receivables

12 Months Ended

Dec. 31, 2022

Investing receivables consisted of the following (in thousands):


	December 31,
	2022		2021
Notes receivable from the City of Huntsville	$	69,703	$	77,784
Other investing loans receivable	17,712		6,041
Amortized cost basis	87,415		83,825
Allowance for credit losses	(2,794)		(1,599)
Investing receivables, net	$	84,621	$	82,226

The balances above include accrued interest receivable, net of allowance for credit losses, of $2.9 million as of December 31, 2022 and $5.3 million as of December 31, 2021.

Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 6) and carry an interest rate of 9.95%. These notes and the accrued and unpaid interest thereon, which compounds annually on March 1, will be repaid using the real estate taxes generated by the properties developed by the joint venture. When these tax revenues are sufficient to cover the debt service on a certain increment of municipal bonds, the City of Huntsville will be required to issue bonds to repay the notes and the accrued and unpaid interest thereon. Each note has a maturity date of the earlier of 30 years from the date issued or the expiration of the tax increment district comprising the developed properties in 2045.

Our other investing loans receivable as of December 31, 2022 carry interest rates ranging from 8.0% to 14.0% and mature within one year.

The fair value of these receivables was approximately $87 million as of December 31, 2022 and $84 million as of December 31, 2021.