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Notes Payable, Unsecured Notes and Credit Facility | 12 Months Ended
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Dec. 31, 2012
Notes Payable, Unsecured Notes and Credit Facility |
Notes Payable, Unsecured Notes and Credit Facility | 3. Notes Payable, Unsecured Notes and Credit Facility The Company's mortgage notes payable, unsecured notes, and Credit Facility as of December 31, 2012 and December 31, 2011 are summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of December 31, 2012 and 2011, as shown in the Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities").
|  | 12-31-12 |  | 12-31-11 |
--- | --- | --- | --- | --- | ---
Fixed rate unsecured notes(1) |  | $ | 1,950,000 |  | $ | 1,556,001 |
Variable rate unsecured notes(1) |  |  | — |  |  | 75,000 |
Fixed rate mortgage notes payable—conventional and tax-exempt(2) |  |  | 1,427,133 |  |  | 1,528,783 |
Variable rate mortgage notes payable—conventional and tax-exempt |  |  | 476,935 |  |  | 440,241 |
Total notes payable and unsecured notes |  |  | 3,854,068 |  |  | 3,600,025 |
Credit Facility |  |  | — |  |  | — |
Total mortgage notes payable, unsecured notes and Credit Facility |  | $ | 3,854,068 |  | $ | 3,600,025 |
(1) Balances at December 31, 2012 and December 31, 2011 exclude $4,202 and $1,802 of debt discount, and $0 and $11, respectively for basis adjustments, as reflected in unsecured notes, net on the Company's Consolidated Balance Sheets. (2) Balances at December 31, 2012 and December 31, 2011 exclude $1,167 and $962 of debt premium as reflected in mortgage notes payable on the Company's Consolidated Balance Sheets. The following debt activity occurred during the year ended December 31, 2012: • In January 2012, the Company repaid $179,400,000 principal amount of its 5.5% 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 which is included in income from discontinued operations on the accompanying Consolidated Statements of Comprehensive Income. • In September 2012, the Company issued $450,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement. The notes mature in September 2022 and were issued at a 2.95% rate. The notes have an effective interest rate of approximately 4.30%, including the effect of an interest rate hedge and offering costs. • In November 2012, the Company repaid $201,601,000 principal amount of its 6.125% unsecured notes pursuant to their scheduled maturity. • In December 2012, the Company issued $250,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement. The notes mature in March 2023 and were issued at a 2.85% rate. The notes have an effective interest rate of approximately 3.00%, including the effect of offering costs. In September 2011, the Company entered into a $750,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the "Credit Facility"). In December 2012, pursuant to an option available under the terms of the Credit Facility, with the approval of the syndicate of lenders, the Company increased the aggregate facility size by $550,000,000 to $1,300,000,000, extended the maturity of the Credit Facility from September 2015 to April 2017, and amended other sections of the Credit Facility (the "Facility Increase"). The Company may further extend the term for up to two additional six month periods (for a total extension of one year), provided we are not in default and upon payment of a $975,000 extension fee for each extension option. In connection with the Facility Increase, the applicable margin over reference rates used to determine the applicable interest rates on our borrowings from time to time decreased. The Credit Facility bears interest at varying levels based on the London Interbank Offered Rate ("LIBOR"), rating levels achieved on our unsecured notes and on a maturity schedule selected by us. The current stated pricing is LIBOR plus 1.05% per annum (1.25% on December 31, 2012). The stated spread over LIBOR can vary from LIBOR plus 0.95% to LIBOR plus 1.725% based on our credit ratings. In addition, a competitive bid option is available for borrowings up to 65% of the Credit Facility amount, which allows banks that are part of the lender consortium to bid to make loans at a rate that is lower than the stated rate if market conditions allow. In connection with the Facility Increase, the annual facility fee was also amended to lower the fee from 0.175% to 0.15% (approximately $1,950,000 annually based on the $1,300,000,000 facility size and based on our current credit rating). The Company had no borrowings outstanding under the Credit Facility and had $44,883,000 and $52,659,000 outstanding in letters of credit that reduced the borrowing capacity as of December 31, 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 $1,513,526,000 as of December 31, 2012). As of December 31, 2012, the Company has guaranteed approximately $245,787,000 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 5.8% and 5.7% at December 31, 2012 and December 31, 2011, respectively. 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 2.7% and 2.3% at December 31, 2012 and December 31, 2011, respectively. Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at December 31, 2012 are as follows (dollars in thousands):
Year |  | Secured notes payments(1) |  | Secured notes maturities |  | Unsecured notes maturities |  | Stated interest rate of unsecured notes |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
2013 |  | $ | 13,375 |  | $ | 223,473 |  | $ | 100,000 |  |  | 4.950 | %
2014 |  |  | 14,284 |  |  | — |  |  | 150,000 |  |  | 5.375 | %
2015 |  |  | 12,170 |  |  | 406,083 |  |  | — |  |  | — |
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 | %
2022 |  |  | 3,147 |  |  | — |  |  | 450,000 |  |  | 2.950 | %
Thereafter |  |  | 83,552 |  |  | 458,635 |  |  | 250,000 |  |  | 2.850 | %
|  | $ | 175,691 |  | $ | 1,728,377 |  | $ | 1,950,000 |  |  |  |
(1) Secured note payments are comprised of the principal pay downs for amortizing mortgage notes. The Company's unsecured notes are redeemable at our option, in whole or in part, generally at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted at a rate equal to the yield on U.S. Treasury securities with a comparable maturity plus a spread between 25 and 45 basis points depending on the specific series of unsecured note, plus accrued and unpaid interest to the redemption date. The indenture under which the Company's unsecured notes were issued contains limitations on the amount of debt the Company can incur or the amount of assets that can be used to secure other financing transactions, and other customary financial and other covenants, with which the Company was in compliance at December 31, 2012.

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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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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