CBP_11_09_21_v15

CLUB FINANCING

SUMMARY

The New Clubhouse, if approved by the Members on December 3rd, will be financed with a 20-year Truist Bank reducing revolver, repaid by monthly member assess- ments of approximately $460/month and 8 new member homes sales/year. The projected borrowings will be hedged throughout the full life of the loan at the current attractive interest rates. Both the Board and the Finance Committee strongly approve of this financing. FINANCING DETAILS The Club’s current lender, Truist Bank, has committed to providing the financing needed to complete the New Clubhouse described in this booklet. The loan will be nearly identical to our existing Truist Bank Reducing Revolver (that was put in place to fund the Substantial Renovation) with the following adjustments:

1. The size of the Reducing Revolver will be increased from $29mm to $58mm.

month for 20 years (vs. the current monthly Member assessment of $262/month for 15 years) plus the proceeds from 8 new member home sales/year for 20 years (vs. the current 8 new member home sales/year for 15 years) The loan will continue as a reducing revolver, which allows the Club to use its cash balances to reduce the loan nightly and seasonally and therefore re- duce the Club’s total interest expense. Importantly, at maturity the Club is projected to have at least as much cash as it initially used to support the project. If the New Clubhouse project is approved by the Members on December 3, 2021, Truist expects that we should be able to close the upsized reducing revolver and put in place the additional swaps and caps by year end, or by early January at the latest.

2. The maturity will be extended 20 years after the new loan’s closing date, expected in late Decem- ber or early January. Our original loan matured 15 years after the first closing in March 2021. 3. The loan will have a 5 basis point higher equiva- lent spread and will refer to SOFR* instead of LI- BOR, as LIBOR is being phased out globally. The spreadwill be 30 day SOFR plus 129 basis points. 4. All of our existing swaps and caps will remain essentially in place (though they will now ref- erence SOFR instead of LIBOR). Additional swaps and caps will be added, so that the Club’s loan will continue to be protected against increases in interest rates for the full term of the loan. 5. The repayment of the loan will be funded with a monthly Member assessment of roughly $460/

1. As part of the original Truist loan, the club swapped a portion of the loan at an all-in cost of 3.03% and purchased an all-in 2.5% cap for

*SOFR has replaced LIBOR as the instrument to price interest rates. SOFR is defined as secured overnight financing rate, LIBOR is the London-Inter Bank offered rate.

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