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3. Notes Payable, Unsecured Notes and Credit Facility
The Company’s mortgage notes payable, unsecured notes and Credit Facility, as defined below, as of June 30, 2012 and December 31, 2011, are summarized below (dollars in thousands). The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of June 30, 2012 and December 31, 2011, as shown in the Condensed Consolidated Balance Sheets (see Note 6, “Real Estate Disposition Activities”).
|
|
|
6-30-12 |
|
12-31-11 |
|
|
|
|
|
|
|
|
|
Fixed rate unsecured notes (1) |
|
$ |
1,451,601 |
|
$ |
1,556,001 |
|
|
Variable rate unsecured notes (1) |
|
— |
|
75,000 |
|
|
Fixed rate mortgage notes payable - conventional and tax-exempt (2) |
|
1,534,037 |
|
1,528,783 |
|
|
Variable rate mortgage notes payable - conventional and tax-exempt |
|
376,935 |
|
440,241 |
|
|
|
|
|
|
|
|
|
Total notes payable and unsecured notes |
|
3,362,573 |
|
3,600,025 |
|
|
|
|
|
|
|
|
|
Credit Facility |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
Total mortgage notes payable, unsecured notes and Credit Facility |
|
$ |
3,362,573 |
|
$ |
3,600,025 |
|
(1) Balances at June 30, 2012 and December 31, 2011 exclude $1,553 and $1,802, respectively, of debt discount, and $0 and $11, respectively, for basis adjustments, as reflected in unsecured notes on the Company’s Condensed Consolidated Balance Sheets.
(2) Balances at June 30, 2012 and December 31, 2011 exclude $1,344 and $962, respectively of debt premium as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets.
The following debt activity occurred during the six months ended June 30, 2012:
· In January 2012, the Company repaid $179,400,000 principal amount of its 5.5% coupon unsecured notes pursuant to their scheduled maturity.
· In February 2012, in conjunction with the acquisition of a community, the Company assumed the existing 4.61% mortgage note in the amount of $11,958,000 that matures in June 2018, and is secured by the community.
· Also in February 2012, the Company repaid a variable rate secured mortgage note in the amount of $48,500,000 in advance of its November 2039 scheduled maturity date. In conjunction with the early retirement the Company incurred a non-cash charge of $1,179,000 for the write off of deferred financing fees which was recognized as a loss on extinguishment of debt.
· In May 2012, the Company repaid a variable rate secured mortgage note in the amount of $14,566,000 in accordance with its scheduled maturity date.
· Also in May 2012 in conjunction with the disposition of an operating community, the Company repaid a variable rate secured mortgage note in the amount of $33,100,000 in advance of its scheduled maturity date. The Company incurred a charge of $602,000 for a prepayment penalty and the write off of deferred financing fees associated with the early repayment of this note.
The Company has a variable rate unsecured credit facility (the “Credit Facility”) with a syndicate of commercial banks, which has an available borrowing capacity of $750,000,000 and a 4-year term, plus a one year extension option. The Credit Facility was entered into in September 2011 and it bears interest at varying levels based on the London InterBank Offered Rate (“LIBOR”), rating levels achieved on the Company’s unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 1.075% per annum (1.32% at June 30, 2012). The Company did not have any borrowings outstanding under the Credit Facility and had $45,975,000 and $52,659,000 outstanding in letters of credit that reduced the borrowing capacity as of June 30, 2012 and December 31, 2011, respectively.
In the aggregate, secured notes payable mature at various dates from April 2013 through July 2066, and are secured by certain apartment communities and improved land parcels (with a net carrying value of $1,535,159,000 as of June 30, 2012).
As of June 30, 2012, the Company has guaranteed approximately $179,777,000 of mortgage notes payable held by wholly owned subsidiaries; all such mortgage notes payable are consolidated for financial reporting purposes. The weighted average interest rate of the Company’s fixed rate mortgage notes payable (conventional and tax-exempt) was 5.7% both at June 30, 2012 and at December 31, 2011. The weighted average interest rate of the Company’s variable rate mortgage notes payable and its Credit Facility, including the effect of certain financing related fees, was 2.6% at June 30, 2012 and 2.3% at December 31, 2011.
Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at June 30, 2012 are as follows (dollars in thousands):
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|
|
|
|
|
|
|
Stated |
|
|
|
|
Secured |
|
Secured |
|
Unsecured |
|
interest rate |
|
|
|
|
notes |
|
notes |
|
notes |
|
of unsecured |
|
|
Year |
|
payments (1) |
|
maturities |
|
maturities |
|
notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
$ |
6,966 |
|
$ |
— |
|
$ |
201,601 |
|
6.125 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
13,376 |
|
223,473 |
|
100,000 |
|
4.950 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
14,284 |
|
— |
|
150,000 |
|
5.375 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
12,170 |
|
406,019 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
12,807 |
|
— |
|
250,000 |
|
5.750 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
13,709 |
|
18,300 |
|
250,000 |
|
5.700 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
14,330 |
|
11,073 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2,597 |
|
610,813 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
2,768 |
|
— |
|
250,000 |
|
6.100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
2,952 |
|
— |
|
250,000 |
|
3.950 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Thereafter |
|
86,700 |
|
458,635 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
182,659 |
|
$ |
1,728,313 |
|
$ |
1,451,601 |
|
|
|
(1) Secured note payments are comprised of the principal pay downs for amortizing mortgage notes.
The Company was in compliance at June 30, 2012 with certain customary financial and other covenants under the Credit Facility and the Company’s unsecured notes. |