Quarterly report pursuant to Section 13 or 15(d)

Debt, Net

v3.19.3
Debt, Net
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt, Net Debt, Net
 
Our debt consisted of the following (dollars in thousands):
 
 
Carrying Value (1) as of
 
 
 
 
 
 
September 30,
2019
 
December 31,
2018
 
September 30, 2019
 
 
 
 
Stated Interest Rates
 
Scheduled Maturity
Mortgage and Other Secured Debt:
 
 

 
 

 
 
 
 
Fixed rate mortgage debt (2)
 
$
144,270

 
$
147,141

 
3.82% - 4.62% (3)
 
2023-2026
Variable rate secured debt (4)
 
55,923

 
23,282

 
LIBOR + 1.45% to 2.35% (5)
 
2020-2026
Total mortgage and other secured debt
 
200,193

 
170,423

 
 
 
 
Revolving Credit Facility
 
220,000

 
213,000

 
LIBOR + 0.775% to 1.45% (6)
 
March 2023 (7)
Term Loan Facility (8)
 
248,598

 
248,273

 
LIBOR + 0.85% to 1.65% (9)
 
2022
Unsecured Senior Notes
 
 
 
 
 
 
 
 
3.600%, $350,000 aggregate principal
 
348,319

 
347,986

 
3.60% (10)
 
May 2023
5.250%, $250,000 aggregate principal
 
247,521

 
247,136

 
5.25% (11)
 
February 2024
3.700%, $300,000 aggregate principal
 
299,196

 
298,815

 
3.70% (12)
 
June 2021
5.000%, $300,000 aggregate principal
 
297,403

 
297,109

 
5.00% (13)
 
July 2025
Unsecured note payable
 
1,071

 
1,167

 
0% (14)
 
May 2026
Total debt, net
 
$
1,862,301

 
$
1,823,909

 
 
 
 

(1)
The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $6.3 million as of September 30, 2019 and $7.2 million as of December 31, 2018.
(2)  
Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates 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 $233,000 as of September 30, 2019 and $281,000 as of December 31, 2018.
(3)
The weighted average interest rate on our fixed rate mortgage debt was 4.16% as of September 30, 2019.
(4)
Includes a construction loan with $76.9 million in remaining borrowing capacity as of September 30, 2019.
(5) 
The weighted average interest rate on our variable rate secured debt was 4.18% as of September 30, 2019.
(6)
The weighted average interest rate on the Revolving Credit Facility was 3.05% as of September 30, 2019.
(7)
The facility matures in March 2023, 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.
(8)  
As of September 30, 2019, we have the ability to borrow an additional $150.0 million in the aggregate under this facility, provided that there is no default under the facility and subject to the approval of the lenders. In addition, in connection with our Revolving Credit Facility, we have the ability to borrow up to $500.0 million under new term loans from the facility’s lender group provided that there is no default under the facility and subject to the approval of the lenders.
(9) 
The interest rate on this loan was 3.35% as of September 30, 2019.
(10)
The carrying value of these notes reflects an unamortized discount totaling $1.2 million as of September 30, 2019 and $1.4 million as of December 31, 2018.  The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%
(11)
The carrying value of these notes reflects an unamortized discount totaling $2.2 million as of September 30, 2019 and $2.6 million as of December 31, 2018.  The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%
(12)
The carrying value of these notes reflects an unamortized discount totaling $638,000 as of September 30, 2019 and $943,000 as of December 31, 2018.  The effective interest rate under the notes, including amortization of the issuance costs, was 3.85%
(13) The carrying value of these notes reflects an unamortized discount totaling $2.2 million as of September 30, 2019 and $2.4 million as of December 31, 2018.  The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%.
(14) 
This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates.  The carrying value of this note reflects an unamortized discount totaling $240,000 as of September 30, 2019 and $294,000 as of December 31, 2018.
 
All debt is owed by COPLP. While COPT is not directly obligated by any debt, it has guaranteed COPLP’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, 2019, we were within the compliance requirements of these financial covenants.

We capitalized interest costs of $2.9 million in the three months ended September 30, 2019, $1.4 million in the three months ended September 30, 2018, $7.3 million in the nine months ended September 30, 2019 and $4.2 million in the nine months ended September 30, 2018.

The following table sets forth information pertaining to the fair value of our debt (in thousands): 
 
September 30, 2019
 
December 31, 2018
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Fixed-rate debt
 

 
 

 
 

 
 

Unsecured Senior Notes
$
1,192,439

 
$
1,226,437

 
$
1,191,046

 
$
1,219,603

Other fixed-rate debt
145,341

 
150,500

 
148,308

 
147,106

Variable-rate debt
524,521

 
532,161

 
484,555

 
486,497

 
$
1,862,301

 
$
1,909,098

 
$
1,823,909

 
$
1,853,206