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Notes Payable

9 Months Ended

Sep. 30, 2021

Notes Payable [Abstract]

Notes Payable

Notes Payable

Our notes payable are reflected net of issuance costs (including original issue discounts), which are amortized as interest expense on the effective interest method over the term of each respective note. Our notes payable at September 30, 2021 and December 31, 2020 are set forth in the tables below:

															Amounts at September 30, 2021
			Coupon Rate						Effective Rate						Principal						Unamortized Costs						Book  Value						Fair  Value
															($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022			2.370%						2.483%						$	500,000					$	(495)					$	499,505					$	509,800
Notes due April 23, 2024			SOFR+0.47%						0.596%						700,000						(1,804)						698,196						704,200
Notes due February 15, 2026			0.875%						1.030%						500,000						(3,246)						496,754						493,515
Notes due September 15, 2027			3.094%						3.218%						500,000						(3,152)						496,848						546,757
Notes due May 1, 2028			1.850%						1.962%						650,000						(4,446)						645,554						653,619
Notes due May 1, 2029			3.385%						3.459%						500,000						(2,334)						497,666						549,252
Notes due May 1, 2031			2.300%						2.419%						650,000						(6,554)						643,446						658,400
															4,000,000						(22,031)						3,977,969						4,115,543
Euro Denominated Unsecured Debt
Notes due April 12, 2024			1.540%						1.540%						115,896						—						115,896						120,868
Notes due November 3, 2025			2.175%						2.175%						280,484						—						280,484						303,644
Notes due September 9, 2030			0.500%						0.640%						811,272						(10,010)						801,262						795,777
Notes due January 24, 2032			0.875%						0.978%						579,480						(5,528)						573,952						581,103
															1,787,132						(15,538)						1,771,594						1,801,392
Mortgage Debt, secured by 27 real estate facilities with a net book value of $96.6 million			3.905%						3.903%						23,627						—						23,627						24,939
															$	5,810,759					$	(37,569)					$	5,773,190					$	5,941,874

			Amounts at
			December 31, 2020
			Book Value						Fair Value
			($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022			$	499,109					$	517,419
Notes due September 15, 2027			496,452						560,833
Notes due May 1, 2029			497,433						574,833
			1,492,994						1,653,085
Euro Denominated Unsecured Debt
Notes due April 12, 2024			122,646						129,192
Notes due November 3, 2025			296,821						323,552
Notes due January 24, 2032			607,301						634,389
			1,026,768						1,087,133
Mortgage Debt			25,230						26,958
			$	2,544,992					$	2,767,176

U.S. Dollar Denominated Unsecured Notes

On January 19, 2021, we completed a public offering of $500 million aggregate principal amount of senior notes bearing interest at an annual rate of 0.875% and maturing on February 15, 2026. Interest on the senior notes is payable semi-annually, commencing on August 15, 2021. In connection with the offering, we incurred $3.8 million in costs.

On April 23, 2021, we completed a public offering of $700 million, $650 million and $650 million aggregate principal amount of senior notes bearing interest at an annual rate of the compounded Secured Overnight Financing Rate (“SOFR”) + 0.47% (reset quarterly and at 0.495% as of September 30, 2021), 1.85% and 2.30%, respectively, and maturing on April 23, 2024, May 1, 2028 and May 1, 2031, respectively. Interest on the 2024 notes is payable quarterly, commencing on July 23, 2021. Interest on the 2028 notes and 2031 notes is payable semi-annually, commencing on November 1, 2021. In connection with the offering, we incurred a total of $13.7 million in costs.

The U.S. Dollar Denominated Unsecured Notes have various financial covenants, with which we were in compliance at September 30, 2021. Included in these covenants are (a) a maximum Debt to Total Assets of 65% (approximately 14% at September 30, 2021) and (b) a minimum ratio of Adjusted EBITDA to Interest Expense of 1.5x (approximately 33x for the twelve months ended September 30, 2021) as well as covenants limiting the amount we can encumber our properties with mortgage debt.

Euro Denominated Unsecured Notes

Our Euro denominated unsecured notes (the “Euro Notes”) consist of four tranches: (i) €242.0 million issued to institutional investors on November 3, 2015 for $264.3 million in net proceeds upon converting the Euros to U.S. Dollars, (ii) €100.0 million issued to institutional investors on April 12, 2016 for $113.6 million in net proceeds upon converting the Euros to U.S. Dollars, (iii) €500.0 million issued in a public offering on January 24, 2020 for $545.2 million in net proceeds upon converting the Euros to U.S. Dollars, and (iv) €700.0 million issued in a public offering on September 9, 2021 for $817.6 million in net proceeds upon converting the Euros to U.S. Dollars. Interest is payable semi-annually on the notes issued November 3, 2015 and April 12, 2016, and annually on the notes issued January 24, 2020 and September 9, 2021. The Euro Notes have financial covenants similar to those of the U.S. Dollar Notes.

We reflect changes in the U.S. Dollar equivalent of the amount payable, as a result of changes in foreign exchange rates as “Foreign currency exchange gain (loss)” on our income statement (gains of $40.9 million and $73.6 million for the three and nine months ended September 30, 2021, respectively, as compared to losses of $41.9 million and $52.3 million for the three and nine months ended September 30, 2020 respectively).

Mortgage Notes

We assumed our non-recourse mortgage debt in connection with property acquisitions, and we recorded such debt at fair value with any premium or discount to the stated note balance amortized using the effective interest method.

At September 30, 2021, the related contractual interest rates are fixed, ranging between 3.2% and 7.1%, and mature between January 1, 2022 and July 1, 2030.

At September 30, 2021, approximate principal maturities of our Notes Payable are as follows (amounts in thousands):

			Unsecured Debt						Mortgage Debt						Total
Remainder of 2021			$	—					$	251					$	251
2022			500,000						2,574						502,574
2023			—						19,219						19,219
2024			815,896						124						816,020
2025			280,484						131						280,615
Thereafter			4,190,752						1,328						4,192,080
			$	5,787,132					$	23,627					$	5,810,759
Weighted average effective rate			1.8%						3.9%						1.8%

Cash paid for interest totaled $49.8 million and $40.2 million for the nine months ended September 30, 2021 and 2020, respectively. Interest capitalized as real estate totaled $2.6 million and $2.5 million for the nine month periods ended September 30, 2021 and 2020, respectively.

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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