| Debt, Net |
Debt, Net
Our debt consisted of the following (dollars in thousands):
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Carrying Value (1) as of |
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September 30,
2017 |
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December 31,
2016 |
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Stated Interest Rates as of |
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Scheduled Maturity as of |
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September 30, 2017 |
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September 30, 2017 |
Mortgage and Other Secured Debt: |
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Fixed rate mortgage debt (2) |
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$ |
151,594 |
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$ |
154,143 |
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3.82% - 7.87% (3) |
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2019-2026 |
Variable rate secured debt |
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13,200 |
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13,448 |
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LIBOR + 1.85% (4) |
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October 2020 |
Total mortgage and other secured debt |
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164,794 |
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167,591 |
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Revolving Credit Facility |
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170,000 |
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— |
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LIBOR + 0.875% to 1.60% (5) |
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May 2019 (6) |
Term Loan Facilities (7) |
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348,371 |
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547,494 |
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LIBOR + 0.90% to 2.40% (8) |
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2020-2022 |
Unsecured Senior Notes |
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3.600%, $350,000 aggregate principal |
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347,445 |
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347,128 |
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3.60% (9) |
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May 2023 |
5.250%, $250,000 aggregate principal |
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246,525 |
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246,176 |
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5.25% (10) |
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February 2024 |
3.700%, $300,000 aggregate principal |
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298,200 |
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297,843 |
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3.70% (11) |
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June 2021 |
5.000%, $300,000 aggregate principal |
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296,639 |
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296,368 |
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5.00% (12) |
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July 2025 |
Unsecured notes payable |
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1,317 |
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1,401 |
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0% (13) |
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2026 |
Total debt, net |
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$ |
1,873,291 |
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$ |
1,904,001 |
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(1) |
The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $4.8 million as of September 30, 2017 and $6.1 million as of December 31, 2016.
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(2) |
Certain fixed rate mortgages carry interest rates that were above or below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $367,000 as of September 30, 2017 and $422,000 as of December 31, 2016.
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(3) |
The weighted average interest rate on our fixed rate mortgage debt was 4.19% as of September 30, 2017.
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(4) |
The interest rate on our variable rate secured debt as of September 30, 2017 was 3.09%.
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(5) |
The weighted average interest rate on the Revolving Credit Facility was 2.40% as of September 30, 2017.
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(6) |
The facility matures in May 2019, with the ability for us to further extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.075% of the total availability under the facility for each extension period.
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(7) |
As of September 30, 2017, we have the ability to borrow an additional $350.0 million in the aggregate under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. On May 1, 2017, we repaid $200.0 million of the loan balance on a term loan scheduled to mature in 2020.
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(8) |
The weighted average interest rate on these loans was 2.93% as of September 30, 2017.
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(9) |
The carrying value of these notes reflects an unamortized discount totaling $1.8 million as of September 30, 2017 and $2.0 million as of December 31, 2016. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%.
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(10) |
The carrying value of these notes reflects an unamortized discount totaling $3.1 million as of September 30, 2017 and $3.4 million as of December 31, 2016. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%.
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(11) |
The carrying value of these notes reflects an unamortized discount totaling $1.4 million as of September 30, 2017 and $1.7 million as of December 31, 2016. The effective interest rate under the notes, including amortization of the issuance costs, was 3.85%.
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(12) The carrying value of these notes reflects an unamortized discount totaling $2.8 million as of September 30, 2017 and $3.0 million as of December 31, 2016. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%.
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(13) |
These notes carry interest rates that were below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying value of these notes reflects an unamortized discount totaling $394,000 as of September 30, 2017 and $460,000 as of December 31, 2016.
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All debt is owed by the Operating Partnership. While COPT is not directly obligated by any debt, it has guaranteed the Operating Partnership’s Revolving Credit Facility, Term Loan Facilities and Unsecured Senior Notes.
Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of September 30, 2017, we were compliant with these covenants.
We capitalized interest costs of $1.1 million in the three months ended September 30, 2017, $1.2 million in the three months ended September 30, 2016, $4.2 million in the nine months ended September 30, 2017 and $4.3 million in the nine months ended September 30, 2016.
The following table sets forth information pertaining to the fair value of our debt (in thousands):
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September 30, 2017 |
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December 31, 2016 |
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Carrying |
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Fair |
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Carrying |
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Fair |
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Amount |
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Value |
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Amount |
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Value |
Fixed-rate debt |
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Unsecured Senior Notes |
$ |
1,188,809 |
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$ |
1,231,222 |
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$ |
1,187,515 |
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$ |
1,220,282 |
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Other fixed-rate debt |
152,911 |
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154,781 |
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155,544 |
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156,887 |
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Variable-rate debt |
531,571 |
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531,520 |
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560,942 |
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558,437 |
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$ |
1,873,291 |
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$ |
1,917,523 |
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$ |
1,904,001 |
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$ |
1,935,606 |
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