| Debt |
Debt
Our debt consisted of the following (dollars in thousands):
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Maximum |
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Availability at |
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Carrying Value at |
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Scheduled Maturity |
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September 30,
2012 |
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September 30,
2012 |
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December 31,
2011 |
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Stated Interest Rates at |
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Dates at |
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September 30, 2012 |
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September 30, 2012 |
Mortgage and Other Secured Loans: |
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Fixed rate mortgage loans (1) |
N/A |
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$ |
978,461 |
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$ |
1,052,421 |
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5.20% - 7.87% (2) |
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2013-2034 |
Variable rate secured loans |
N/A |
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38,671 |
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39,213 |
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LIBOR + 2.25% (3) |
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2015 |
Other construction loan facilities |
$ |
123,802 |
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70,374 |
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40,336 |
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LIBOR + 1.95% to 2.75% (4) |
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2013-2015 |
Total mortgage and other secured loans |
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1,087,506 |
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1,131,970 |
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Revolving Credit Facility (5) |
800,000 |
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80,000 |
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662,000 |
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LIBOR + 1.75% to 2.50% (6) |
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September 1, 2014 |
Term Loan Facilities (7) |
770,000 |
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770,000 |
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400,000 |
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LIBOR + 1.65% to 2.60% (8) |
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2015-2019 |
Unsecured notes payable |
N/A |
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1,809 |
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5,050 |
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0% (9) |
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2026 |
4.25% Exchangeable Senior Notes |
N/A |
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230,000 |
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227,283 |
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4.25% |
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April 2030 (10) |
Total debt |
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$ |
2,169,315 |
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$ |
2,426,303 |
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(1) |
Several of the 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 $1.5 million at September 30, 2012 and $2.4 million at December 31, 2011.
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(2) |
The weighted average interest rate on these loans was 6.00% at September 30, 2012.
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(3) |
The interest rate on the loan outstanding was 2.48% at September 30, 2012.
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(4) |
The weighted average interest rate on these loans was 2.72% at September 30, 2012.
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(5) |
Effective August 10, 2012, we exercised our right to reduce the lenders’ aggregate commitment under the facility from $1.0 billion to $800 million, with the ability for us to increase the lenders’ aggregate commitment to $1.3 billion, provided that there is no default under the facility and subject to the approval of the lenders.
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(6) |
The weighted average interest rate on the Revolving Credit Facility was 2.19% at September 30, 2012.
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(7) |
We have the ability to borrow an aggregate of an additional $180.0 million under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. As described further below, we entered into new facilities in 2012.
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(8) |
The weighted average interest rate on these loans was 2.19% at September 30, 2012.
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(9) |
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 $902,000 at September 30, 2012 and $1.8 million at December 31, 2011.
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(10) |
As described further in our 2011 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at the Operating Partnership’s discretion, our common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2012 and is equivalent to an exchange price of $47.96 per common share). The carrying value of these notes included a principal amount of $240 million and an unamortized discount totaling $10.0 million at September 30, 2012 and $12.7 million at December 31, 2011. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2012 and December 31, 2011 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands):
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2012 |
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2011 |
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2012 |
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2011 |
Interest expense at stated interest rate |
$ |
2,550 |
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$ |
2,550 |
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$ |
7,650 |
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$ |
7,650 |
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Interest expense associated with amortization of discount |
919 |
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866 |
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2,717 |
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2,558 |
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Total |
$ |
3,469 |
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$ |
3,416 |
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$ |
10,367 |
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$ |
10,208 |
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Effective February 14, 2012, we entered into an unsecured term loan agreement with a group of lenders for which J.P. Morgan Securities LLC and KeyBank Capital Markets acted as joint lead arrangers and joint book runners, KeyBank National Association acted as administrative agent and JPMorgan Chase Bank, N.A. acted as syndication agent. We borrowed $250 million under the term loan. The term loan matures on February 14, 2017. The variable interest rate on the loan is based on the LIBOR rate (customarily the 30-day rate) plus 1.65% to 2.40%, as determined by our leverage levels.
Effective August 3, 2012, we entered into an unsecured term loan agreement with a group of lenders for which Wells Fargo Securities, LLC acted as sole arranger and sole book runner, Wells Fargo Bank, National Association acted as administrative agent and Capital One, N.A. acted as documentation agent. We borrowed $120 million under the term loan, with the ability for us to borrow an additional $80 million, provided that there is no default under the loan and subject to the approval of the lenders. The term loan matures on August 2, 2019. The variable interest rate on the loan is based on the LIBOR rate (customarily the 30-day rate) plus 2.10% to 2.60%, as determined by our leverage levels.
We capitalized interest costs of $3.4 million in the three months ended September 30, 2012, $4.5 million in the three months ended September 30, 2011, $10.8 million in the nine months ended September 30, 2012 and $13.1 million in the nine months ended September 30, 2011.
The following table sets forth information pertaining to the fair value of our debt (in thousands):
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September 30, 2012 |
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December 31, 2011 |
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Carrying |
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Estimated |
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Carrying |
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Estimated |
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Amount |
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Fair Value |
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Amount |
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Fair Value |
Fixed-rate debt |
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4.25% Exchangeable Senior Notes |
$ |
230,000 |
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$ |
240,335 |
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$ |
227,283 |
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$ |
238,077 |
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Other fixed-rate debt |
980,270 |
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992,977 |
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1,057,471 |
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1,054,424 |
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Variable-rate debt |
959,045 |
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959,944 |
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1,141,549 |
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1,139,856 |
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$ |
2,169,315 |
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$ |
2,193,256 |
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$ |
2,426,303 |
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$ |
2,432,357 |
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