COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Debt, Net (Tables)

Debt, Net (Tables)

6 Months Ended

Jun. 30, 2024

Our debt consisted of the following (dollars in thousands):



	Carrying Value (1) as of					June 30, 2024
	June 30, 2024		December 31, 2023
					Stated Interest Rates		Scheduled Maturity
Mortgage and Other Secured Debt:
Fixed-rate mortgage debt	$	37,645	$	66,314		3.82%		June 2026
Variable-rate secured debt	32,683		32,894			SOFR + 0.10% + 1.45% to 1.55% (2)		2025-2026 (3)
Total mortgage and other secured debt	70,328		99,208
Revolving Credit Facility	75,000		75,000			SOFR + 0.10% + 0.725% to 1.400% (4)		October 2026 (5)
Term Loan Facility	124,462		124,291			SOFR + 0.10% + 0.850% to 1.700% (6)		January 2026 (7)
Unsecured Senior Notes
2.25%, $400,000 aggregate principal	398,151		397,608			2.25% (8)		March 2026
5.25%, $345,000 aggregate principal (9)	336,682		335,802			5.25% (10)		September 2028
2.00%, $400,000 aggregate principal	397,715		397,471			2.00% (11)		January 2029
2.75%, $600,000 aggregate principal	591,768		591,212			2.75% (12)		April 2031
2.90%, $400,000 aggregate principal	395,477		395,265			2.90% (13)		December 2033
Unsecured note payable	342		430			0% (14)		May 2026
Total debt, net	$	2,389,925	$	2,416,287

(1)The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $4.6 million as of June 30, 2024 and $5.3 million as of December 31, 2023.

(2)Including the effect of interest rate swaps that hedge the risk of interest rate changes, the weighted average interest rate on our variable-rate secured debt as of June 30, 2024 was 2.44%; excluding the effect of these swaps, the weighted average interest rate on this debt as of June 30, 2024 was 6.94%.

(3)Most of this debt matures in 2025, with the ability for us to extend such maturity by two 12-month periods at our option, provided that there is no default on the debt and we pay an extension fee of 0.10% of the debt balance for each extension period.

(4)The weighted average interest rate on the Revolving Credit Facility was 6.48% as of June 30, 2024, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).

(5)The facility matures in October 2026, with the ability for us to 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 0.0625% of the total availability under the facility for each extension period.

(6)The interest rate on this loan was 6.73% as of June 30, 2024, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).

(7)This facility matures in January 2026, with the ability for us to extend such maturity by two 12-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.125% of the outstanding loan balance for each extension period.

(8)The carrying value of these notes reflects unamortized discounts and commissions totaling $1.5 million as of June 30, 2024 and $1.9 million as of December 31, 2023. The effective interest rate under the notes, including amortization of such costs, was 2.48%.

(9)As described further in our 2023 Annual Report on Form 10-K, these notes have an exchange settlement feature under which the notes may, under certain circumstances, be exchangeable at the option of the holders. Upon exchange, the principal amount of notes is payable in cash, with the remainder of the exchange obligation, if any, as determined based on the exchange price per common share at the time of settlement, payable in cash, common shares or a combination thereof at our election. As of June 30, 2024, the exchange rate of the notes equaled 33.3882 of our common shares per $1,000 principal amount of notes (equivalent to an exchange price of approximately $29.95 per common share).

(10)The carrying value of these notes reflects unamortized commissions totaling $7.4 million as of June 30, 2024 and $8.1 million as of December 31, 2023. The effective interest rate under the notes, including amortization of such costs, was 5.83%.

(11)The carrying value of these notes reflects unamortized discounts and commissions totaling $1.6 million as of June 30, 2024 and $1.8 million as of December 31, 2023. The effective interest rate under the notes, including amortization of such costs, was 2.09%.

(12)The carrying value of these notes reflects unamortized discounts and commissions totaling $7.1 million as of June 30, 2024 and $7.6 million as of December 31, 2023. The effective interest rate under the notes, including amortization of such costs, was 2.94%.

(13)The carrying value of these notes reflects unamortized discounts and commissions totaling $3.7 million as of June 30, 2024 and $3.9 million as of December 31, 2023. The effective interest rate under the notes, including amortization of such costs, was 3.01%.

(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 $19,000 as of June 30, 2024 and $32,000 as of December 31, 2023.

Schedule of interest expense

The table below sets forth interest expense recognized on the 5.25% Exchangeable Senior Notes due 2028 (the “5.25% Notes”) for the three and six months ended June 30, 2024 (in thousands):


	June 30, 2024
	Three Months Ended		Six Months Ended
Interest expense at stated interest rate	$	4,528	$	9,056
Interest expense associated with amortization of debt discount and issuance costs	387		769
Total	$	4,915	$	9,825

Schedule of debt maturities

Our debt matures on the following schedule (in thousands):


Year Ending December 31,	June 30, 2024
2024 (1)	$	903
2025	23,717
2026	646,300
2027	—
2028	345,000
Thereafter	1,400,000
Total	$	2,415,920	(2)

(1)Represents the six months ending December 31, 2024.

(2)Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $26.0 million.

Schedule of fair value of debt

The following table sets forth information pertaining to the fair value of our debt (in thousands):


	June 30, 2024				December 31, 2023
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Fixed-rate debt
Unsecured Senior Notes	$	2,119,793	$	1,910,936	$	2,117,358	$	1,876,611
Other fixed-rate debt	37,987		35,695		66,744		63,692
Variable-rate debt	232,145		232,090		232,185		232,270
	$	2,389,925	$	2,178,721	$	2,416,287	$	2,172,573