SECURED AND UNSECURED DEBT, NET

The following is a summary of our secured and unsecured debt at December 31, 2015 and 2014 (dollars in thousands):



	Principal Outstanding						For the Year Ended December 31, 2015
							Weighted Average Interest Rate		Weighted Average Years to Maturity	Number of Communities Encumbered
	December 31,
	2015			2014
Secured Debt:
Fixed Rate Debt
Mortgage notes payable (a)	$	442,617		$	401,210		4.57	%	4.5	8
Fannie Mae credit facilities (b)	514,462			568,086			5.23	%	3.1	18
Deferred financing costs	(4,278		)	(5,583		)
Total fixed rate secured debt, net	952,801			963,713			4.93	%	3.7	26
Variable Rate Debt
Mortgage notes payable	31,337			31,337			2.19	%	1.1	1
Tax-exempt secured notes payable (c)	94,700			94,700			0.75	%	7.2	2
Fannie Mae credit facilities (b)	299,378			266,196			1.71	%	4.1	8
Deferred financing costs	(1,271		)	(1,625		)
Total variable rate secured debt, net	424,144			390,608			1.53	%	4.5	11
Total Secured Debt, net	1,376,945			1,354,321			3.88	%	4.0	37

Unsecured Debt:
Variable Rate Debt
Borrowings outstanding under unsecured credit facilities due January 2020 and December 2017, respectively (d) (h)	150,000			152,500			1.19	%	4.1
Borrowings outstanding under unsecured working capital credit facility due January 2019 (e)	—			—			—	%	3.0
1.21% Term Loan Facility due January 2021 and June 2018, respectively (d) (h)	35,000			35,000			1.21	%	5.1
Fixed Rate Debt
5.25% Medium-Term Notes due January 2015 (net of discounts of $0 and $6, respectively) (f)	—			325,169			—	%	0.0
5.25% Medium-Term Notes due January 2016 (i)	83,260			83,260			5.25	%	0.0
6.21% Medium-Term Note due July 2016 (j)	12,091			—			6.21	%	0.5
4.25% Medium-Term Notes due June 2018 (net of discounts of $1,037 and $1,465, respectively) (h)	298,963			298,535			4.25	%	2.4
3.70% Medium-Term Notes due October 2020 (net of discounts of $38 and $46, respectively) (h)	299,962			299,954			3.70	%	4.8
1.44% Term Loan Facility due January 2021 and June 2018, respectively (d) (h)	315,000			315,000			1.44	%	5.1
4.63% Medium-Term Notes due January 2022 (net of discounts of $2,164 and $2,523, respectively) (h)	397,836			397,477			4.63	%	6.0
3.75% Medium-Term Notes due July 2024 (net of discounts of $886 and $990, respectively) (h)	299,114			299,010			3.75	%	8.5
8.50% Debentures due September 2024	15,644			15,644			8.50	%	8.7



4.00% Medium-Term Notes due October 2025 (net of discount of $671 and $0, respectively) (g) (h)	299,329			—			4.00	%	9.8
Other	24			27			N/A		N/A
Deferred financing costs	(12,373		)	(10,598		)	N/A		N/A
Total Unsecured Debt, net	2,193,850			2,210,978			3.64	%	5.7
Total Debt, net	$	3,570,795		$	3,565,299		3.74	%	5.0

For purposes of classification of the above table, variable rate debt with a derivative financial instrument designated as a cash flow hedge is deemed as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.

Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon payments due at maturity. As of December 31, 2015, secured debt encumbered $2.4 billion or 25.9% of UDR’s total real estate owned based upon gross book value ($6.8 billion or 74.1% of UDR’s real estate owned based on gross book value is unencumbered).

(a) At December 31, 2015, fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from June 2016 through November 2025 and carry interest rates ranging from 3.43% to 6.16%.

The Company will from time to time acquire properties subject to fixed rate debt instruments. In those situations, management will record the secured debt at its estimated fair value and amortize any difference between the fair value and par to interest expense over the life of the underlying debt instrument. In October 2015, the Company assumed debt with a fair market value of $96.5 million as part of our acquisition of the six communities from Home OP, as described in Note 4, Real Estate Owned.

During the years ended December 31, 2015, 2014, and 2013, the Company had $5.3 million, $5.1 million, and $5.1 million, respectively, of amortization expense on the fair market adjustment of debt assumed in acquisition of properties, which was included in Interest expense on the Consolidated Statements of Operations. The unamortized fair market adjustment was a net premium of $10.0 million and $6.7 million at December 31, 2015 and 2014, respectively.

(b) UDR has three secured credit facilities with Fannie Mae with an aggregate commitment of $813.8 million at December 31, 2015. The Fannie Mae credit facilities are for terms of seven to ten years (maturing at various dates from May 2017 through July 2023) and bear interest at floating and fixed rates. At December 31, 2015, $514.5 million of the outstanding balance was fixed at a weighted average interest rate of 5.23% and the remaining balance of $299.4 million on these facilities had a weighted average variable interest rate of 1.71%.

Further information related to these credit facilities is as follows (dollars in thousands):



	December 31, 2015			December 31, 2014
Borrowings outstanding	$	813,840		$	834,282
Weighted average borrowings during the period ended	822,521			835,873
Maximum daily borrowings during the period ended	834,003			837,564
Weighted average interest rate during the period ended	4.0		%	4.1		%
Weighted average interest rate at the end of the period	3.9		%	4.0		%

(c) The variable rate mortgage notes payable that secure tax-exempt housing bond issues mature on August 2019 and March 2032. Interest on these notes is payable in monthly installments. The variable mortgage notes have interest rates of 0.75% and 0.76%, respectively, as of December 31, 2015.

(d) On October 20, 2015, the Company, as borrower, entered into a credit agreement (the “Credit Agreement”), which provides for a $1.1 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) and a $350.0 million senior unsecured term loan facility (the “Term Loan Facility”). The Credit Agreement includes an accordion feature that allows the total commitments under the Revolving Credit Facility and the total borrowings under the Term Loan Facility to be increased to an aggregate maximum amount of up to $2.0 billion, subject to certain conditions, including obtaining commitments from any one or more lenders. The Revolving Credit Facility has a scheduled maturity date of January 31, 2020, with two six-month extension options, subject to certain conditions. The Term Loan Facility has a scheduled maturity date of January 29, 2021.

The Credit Agreement replaced (i) the Company’s previous $900 million revolving credit facility originally scheduled to mature in December 2017 and (ii) the Company’s $250 million term loan and the Company’s $100 million term loan, both originally due June 2018.

Based on the Company’s current credit rating, the Revolving Credit Facility has an interest rate equal to LIBOR plus a margin of 90 basis points and a facility fee of 15 basis points, and the Term Loan Facility has an interest rate equal to LIBOR plus a margin of 95 basis points. Depending on the Company’s credit rating, the margin under the Revolving Credit Facility ranges from 85 to 155 basis points, the facility fee ranges from 12.5 to 30 basis points, and the margin under the Term Loan Facility ranges from 90 to 175 basis points.

The Credit Agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Credit Agreement also includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the Credit Agreement to be immediately due and payable.

The Company’s obligations under the Credit Agreement are guaranteed by the Operating Partnership, pursuant to a guaranty dated as of October 20, 2015.

The following is a summary of short-term bank borrowings under UDR’s revolving credit facility at December 31, 2015 and 2014 (dollars in thousands):



	December 31, 2015			December 31, 2014
Total revolving credit facility	$	1,100,000		$	900,000
Borrowings outstanding at end of period (1)	150,000			152,500
Weighted average daily borrowings during the period ended	353,647			291,761
Maximum daily borrowings during the period ended	541,500			625,000
Weighted average interest rate during the period ended	1.1		%	1.2		%
Interest rate at end of the period	1.2		%	1.1		%

(1) Excludes $2.3 million and $1.9 million of letters of credit at December 31, 2015 and 2014, respectively.

(e) In December 2015, the Company entered into a working capital credit facility, which provides for a $30 million unsecured revolving credit facility (the “Working Capital Credit Facility”) with a scheduled maturity date of January 1, 2019. Based on the Company’s current credit rating, the Working Capital Credit Facility has an interest rate equal to LIBOR plus a margin of 90 basis points. Depending on the Company’s credit rating, the margin ranges from 85 to 155 basis points.

(f) Paid off at maturity with borrowings under the Company’s $900 million unsecured revolving credit facility.

(g) On September 22, 2015, the Company issued $300 million of 4.00% senior unsecured medium-term notes due October 1, 2025. Interest is payable semi-annually beginning on April 1, 2016. The notes were priced at 99.770% of the principal amount at issuance and had a discount of $0.7 million at December 31, 2015. The Company used the net proceeds to pay down a portion of the borrowings outstanding on its prior $900 million unsecured credit facility and for general corporate purposes. The Company previously entered into forward starting interest rate swaps to hedge against interest rate risk on $200 million of this debt issuance. The all-in weighted average interest rate, inclusive of the impact of these interest rate swaps, was 4.55%.

(h) The Operating Partnership is a guarantor at December 31, 2015 and 2014.

(i) In January 2016, we paid off $83.3 million of 5.25% medium-term notes due January 2016 with borrowings under the Company’s $1.1 billion unsecured revolving credit facility.

(j) The 6.21% Medium-Term Note due July 2016 was acquired in February 2015 as part of the acquisition of an office building in Highlands Ranch, Colorado, as described in See Note 4, Real Estate Owned.

The aggregate maturities, including amortizing principal payments of secured debt, of total debt for the next ten years subsequent to December 31, 2015 are as follows (dollars in thousands):



Year	Total Fixed Secured Debt		Total Variable Secured Debt			Total Secured Debt		Total Unsecured Debt			Total Debt
2016	$	149,058	$	—		$	149,058	$	95,053		$	244,111
2017	179,189		96,337			275,526		—			275,526
2018	73,096		137,969			211,065		300,000			511,065
2019	247,796		67,700			315,496		—			315,496
2020	170,664		—			170,664		450,000			620,664
2021	—		—			—		350,000			350,000
2022	—		—			—		400,000			400,000
2023	—		96,409			96,409		—			96,409
2024	—		—			—		315,644			315,644
2025	127,600		—			127,600		300,000			427,600
Thereafter	—		27,000			27,000		—			27,000
Subtotal	947,403		425,415			1,372,818		2,210,697			3,583,515
Non-cash (a)	5,398		(1,271		)	4,127		(16,847		)	(12,720		)
Total	$	952,801	$	424,144		$	1,376,945	$	2,193,850		$	3,570,795

(a) Includes the unamortized balance of fair market value adjustments, premiums/discounts, deferred hedge gains, and deferred financing costs. For the years ended December 31, 2015 and 2014, the Company amortized $7.0 million and $7.2 million, respectively, of deferred financing costs into Interest expense.

We were in compliance with the covenants of our debt instruments at December 31, 2015.