Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.1.9
Debt
3 Months Ended
Mar. 31, 2015
Debt Disclosure [Abstract]  
Debt
Debt
 
Our debt consisted of the following (dollars in thousands):
 
Maximum
 
 
 
 
 
 
 
 
 
 Availability at
 
Carrying Value at
 
 
 
Scheduled Maturity
 
March 31,
2015
 
March 31,
2015
 
December 31,
2014
 
Stated Interest Rates as of
 
as of
 
 
 
 
March 31, 2015
 
March 31, 2015
Mortgage and Other Secured Loans:
 

 
 

 
 

 
 
 
 
Fixed rate mortgage loans (1)
 
 
$
385,693

 
$
387,139

 
3.96% - 10.65% (2)
 
2015-2024
Variable rate secured loan
 
 
36,668

 
36,877

 
LIBOR + 2.25% (3)
 
November 2015
Total mortgage and other secured loans
 

 
422,361

 
424,016

 
 
 
 
Revolving Credit Facility
$
800,000

 
164,000

 
83,000

 
LIBOR + 0.975% to 1.75% (4)
 
July 2017
Term Loan Facilities
(5)
 
520,000

 
520,000

 
LIBOR + 1.10% to 2.60% (6)
 
2015-2019
Unsecured Senior Notes
 
 
 
 
 
 
 
 
 
3.600% Senior Notes (7)
 
 
347,560

 
347,496

 
3.60%
 
May 2023
5.250% Senior Notes (8)
 
 
245,888

 
245,797

 
5.25%
 
February 2024
3.700% Senior Notes (9)
 
 
297,655

 
297,569

 
3.70%
 
June 2021
Unsecured notes payable
 
 
1,583

 
1,607

 
0% (10)
 
2026
4.25% Exchangeable Senior Notes (11)
 
 
575

 
572

 
4.25%
 
(11)
Total debt, net
 

 
$
1,999,622

 
$
1,920,057

 
 
 
 

(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 $36,000 as of March 31, 2015 and $42,000 as of December 31, 2014.
(2)
Includes a $150.0 million nonrecourse mortgage loan in default secured by two operating properties in Northern Virginia with an aggregate estimated fair value that was less than the loan balance. This loan has an interest rate of 10.65% (including the effect of default interest). Additional disclosure regarding this loan is provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this Quarterly Report on Form 10-Q. The maximum stated interest rate would be 7.87%, excluding the incremental additional interest rate associated with the default rate on the loan in default. The weighted average interest rate on our fixed rate mortgage loans was 8.11% as of March 31, 2015 (or 6.16% excluding the incremental additional interest rate associated with the default rate on the loan in default).
(3) 
The interest rate on the loan outstanding was 2.42% as of March 31, 2015.
(4)
The weighted average interest rate on the Revolving Credit Facility was 1.45% as of March 31, 2015.
(5)  
We have the ability to borrow an additional $330.0 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.
(6) 
The weighted average interest rate on these loans was 1.82% as of March 31, 2015.
(7)
The carrying value of these notes included a principal amount of $350.0 million and an unamortized discount totaling $2.4 million as of March 31, 2015 and $2.5 million as of December 31, 2014.  The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%
(8)
The carrying value of these notes included a principal amount of $250.0 million and an unamortized discount totaling $4.1 million as of March 31, 2015 and $4.2 million as of December 31, 2014.  The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%
(9)
The carrying value of these notes included a principal amount of $300.0 million and an unamortized discount totaling $2.3 million as of March 31, 2015 and $2.4 million as of December 31, 2014.  The effective interest rate under the notes, including amortization of the issuance costs, was 3.85%
(10) 
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 $628,000 as of March 31, 2015 and $654,000 as of December 31, 2014.
(11) 
As described further in our 2014 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 March 31, 2015 and is equivalent to an exchange price of $47.96 per common share).  The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $3,000 as of December 31, 2014.  The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%.  Because the closing price of our common shares as of March 31, 2015 and December 31, 2014 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.  On April 20, 2015, we redeemed these notes at 100% of their principal amount.
 
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, Unsecured Senior Notes and 4.25% Exchangeable Senior Notes.

We capitalized interest costs of $2.1 million in the three months ended March 31, 2015 and $1.6 million in the three months ended March 31, 2014.

The following table sets forth information pertaining to the fair value of our debt (in thousands): 
 
March 31, 2015
 
December 31, 2014
 
Carrying
 
Estimated
 
Carrying
 
Estimated
 
Amount
 
Fair Value
 
Amount
 
Fair Value
Fixed-rate debt
 

 
 

 
 

 
 

Unsecured Senior Notes
$
891,103

 
$
918,074

 
$
890,862

 
$
901,599

4.25% Exchangeable Senior Notes
575

 
575

 
572

 
575

Other fixed-rate debt
387,276

 
350,835

 
388,746

 
355,802

Variable-rate debt
720,668

 
722,752

 
639,877

 
642,091

 
$
1,999,622

 
$
1,992,236

 
$
1,920,057

 
$
1,900,067