| Schedule of 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,
2013 |
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September 30,
2013 |
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December 31,
2012 |
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Stated Interest Rates at |
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Dates at |
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September 30, 2013 |
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September 30, 2013 |
Mortgage and Other Secured Loans: |
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Fixed rate mortgage loans (1) |
N/A |
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$ |
882,311 |
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$ |
948,414 |
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3.96% - 7.87% (2) |
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2014-2034 |
Variable rate secured loan |
N/A |
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37,894 |
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38,475 |
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LIBOR + 2.25% (3) |
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11/2/2015 |
Other construction loan facilities |
$ |
26,150 |
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— |
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29,557 |
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N/A |
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N/A |
Total mortgage and other secured loans |
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920,205 |
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1,016,446 |
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Revolving Credit Facility (4) |
800,000 |
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— |
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— |
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LIBOR + 0.975% to 1.75% (5) |
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7/1/2017 |
Term Loan Facilities (6) |
(6 |
) |
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620,000 |
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770,000 |
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LIBOR + 1.10% to 2.60% (7) |
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2015-2019 |
Unsecured Senior Notes (8) |
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3.600% Senior Notes |
N/A |
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347,183 |
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— |
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3.60% |
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5/15/2023 |
5.250% Senior Notes |
N/A |
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245,360 |
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— |
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5.25% |
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2/15/2024 |
Unsecured notes payable |
N/A |
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1,723 |
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1,788 |
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0% (9) |
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5/1/2026 |
4.25% Exchangeable Senior Notes (10) |
N/A |
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560 |
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230,934 |
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4.25% |
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4/15/2030 |
Total debt, net |
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$ |
2,135,031 |
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$ |
2,019,168 |
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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 $465,000 at September 30, 2013 and $1.3 million at December 31, 2012.
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(2) |
The weighted average interest rate on these loans was 5.98% at September 30, 2013.
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(3) |
The interest rate on the loan outstanding was 2.43% at September 30, 2013.
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(4) |
Refer to the paragraph below for disclosure pertaining to the Revolving Credit Facility. |
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(5) |
The weighted average interest rate on the Revolving Credit Facility was 1.45% at September 30, 2013.
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(6) |
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.
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(7) |
The weighted average interest rate on these loans was 1.80% at September 30, 2013.
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(8) |
Refer to the paragraphs below for disclosure pertaining to these notes. |
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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 $788,000 at September 30, 2013 and $873,000 at December 31, 2012.
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(10) |
As described further in our 2012 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 COPLP’s discretion, COPT 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, 2013 and is equivalent to an exchange price of $47.96 per common share). During the nine months ended September 30, 2013, we repaid $239.4 million principal amount of these notes and recognized a $25.9 million loss on early extinguishment of debt. The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $15,000 at September 30, 2013 and a principal amount of $240.0 million and an unamortized discount totaling $9.1 million at December 31, 2012. 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, 2013 and December 31, 2012 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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2013 |
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2012 |
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2013 |
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2012 |
Interest expense at stated interest rate |
$ |
6 |
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$ |
2,550 |
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$ |
4,201 |
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$ |
7,650 |
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Interest expense associated with amortization of discount |
2 |
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919 |
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1,613 |
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2,717 |
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Total |
$ |
8 |
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$ |
3,469 |
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$ |
5,814 |
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$ |
10,367 |
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| Schedule of the fair value of debt |
The following table sets forth information pertaining to the fair value of our debt (in thousands):
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September 30, 2013 |
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December 31, 2012 |
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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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Unsecured Senior Notes |
$ |
592,543 |
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$ |
579,654 |
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$ |
— |
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$ |
— |
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4.25% Exchangeable Senior Notes |
560 |
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575 |
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230,934 |
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240,282 |
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Other fixed-rate debt |
884,034 |
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812,246 |
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950,202 |
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968,180 |
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Variable-rate debt |
657,894 |
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661,593 |
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838,032 |
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845,558 |
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$ |
2,135,031 |
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$ |
2,054,068 |
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$ |
2,019,168 |
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$ |
2,054,020 |
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