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Loans Receivable | 9 Months Ended
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Sep. 30, 2016
Loans Receivable. |
Loans Receivable | NOTE 6. Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
|  | September 30, 2016 |  | December 31, 2015 |
|  | Real Estate |  | Other |  |  |  |  | Real Estate |  | Other |  |  |  |
|  | Secured |  | Secured |  | Total |  | Secured |  | Secured |  | Total |
Mezzanine(1) (2) |  | $ | — |  | $ | 622,671 |  | $ | 622,671 |  | $ | — |  | $ | 660,138 |  | $ | 660,138 |
Other(3) |  |  | 64,057 |  |  | — |  |  | 64,057 |  |  | 114,322 |  |  | — |  |  | 114,322 |
Unamortized discounts, fees and costs(1) |  |  | 539 |  |  | (4,273) |  |  | (3,734) |  |  | 961 |  |  | (6,678) |  |  | (5,717) |
|  | $ | 64,596 |  | $ | 618,398 |  | $ | 682,994 |  | $ | 115,283 |  | $ | 653,460 |  | $ | 768,743 |
| (1) |  | At September 30, 2016, included £281 million ($365 million) outstanding and £3 million ($3 million) of associated unamortized discounts, fees and costs. At December 31, 2015, included £273 million ($403 million) outstanding and £4 million ($5 million) of associated unamortized discounts, fees and costs.
| (2) |  | At September 30, 2016, the Company had £37 million ($49 million) remaining under its commitments to fund development projects and capital expenditures under its U.K. development projects.
| (3) |  | At September 30, 2016, the Company had $0.5 million remaining of commitments to fund development projects and capital expenditures under its senior housing development loan program.
Loans Receivable Internal Ratings The following table summarizes the Company’s internal ratings for loans receivable at September 30, 2016 (dollars in thousands):
|  | Carrying |  | Percentage of |  | Internal Ratings |
Investment Type |  | Amount |  | Loan Portfolio |  | Performing Loans |  | Watch List Loans |  | Workout Loans |
Real estate secured |  | $ | 64,596 |  | 9 |  | $ | 64,596 |  | $ | — |  | $ | — |
Other secured |  |  | 618,398 |  | 91 |  |  | 362,041 |  |  | 256,357 |  |  | — |
|  | $ | 682,994 |  | 100 |  | $ | 426,637 |  | $ | 256,357 |  | $ | — |
Real Estate Secured Loans Four Seasons Health Care. In December 2015, the Company purchased £28 million ($42 million) of Four Seasons Health Care’s (“Four Seasons”) £40 million senior secured term loan. The loan is secured by, among other things, the real estate assets of Four Seasons, and represents the most senior debt tranche. The loan bears interest at a rate of LIBOR plus 6.0% per annum and matures in December 2017. Other Secured Loans HC-One Facility. In November 2014, the Company was the lead investor in the financing for Formation Capital and Safanad’s acquisition of NHP, a company that, at closing, owned 273 nursing and residential care homes representing over 12,500 beds in the U.K. principally operated by HC-One. The Company provided a loan facility (the “HC-One Facility”), secured by substantially all of NHP’s assets, totaling £395 million, with £363 million ($574 million) drawn at closing and has a five-year term. In February 2015, the Company increased the HC-One Facility by £108 million ($164 million) to £502 million ($795 million), in conjunction with HC-One’s acquisition of Meridian Healthcare. In April 2015, the Company converted £174 million of the HC-One Facility into a sale-leaseback transaction for 36 nursing and residential care homes located throughout the U.K. In September 2015, the Company amended and increased its commitment under the HC-One Facility by £11 million primarily for the funding of capital expenditures and a development project. As part of the amendments, the Company shortened the non-call period by 17 months and provided consent for (i) the paydown of £34 million from disposition proceeds without a prepayment premium and (ii) the spin-off of 36 properties into a separate JV. In return, the Company retained security over the spin-off properties for a period of two years. During the year ended December 31, 2015, the Company received paydowns of £34 million ($52 million). At September 30, 2016, the HC-One Facility had an outstanding balance of $362 million. Tandem Health Care Loan. On July 31, 2012, the Company closed a mezzanine loan facility to lend up to $205 million to Tandem Health Care (“Tandem”) as part of the recapitalization of a post-acute/skilled nursing portfolio. The Company funded $100 million (the “First Tranche”) at closing and funded an additional $102 million (the “Second Tranche”) in June 2013. In May 2015, the Company increased and extended the mezzanine loan facility with Tandem to: (i) fund $50 million (the “Third Tranche”) and $5 million (the “Fourth Tranche”), which proceeds were used to repay a portion of Tandem’s existing senior and mortgage debt, respectively, (ii) extend its maturity to October 2018 and (iii) extend the prepayment penalty period to January 2017. The loans bear interest at fixed rates of 12%, 14%, 6% and 6% per annum for the First, Second, Third and Fourth Tranches, respectively. Based on the recent decline in Tandem’s operating performance, as of September 30, 2016, the Company assigned an internal rating of “Watch List” to its Tandem Health Care Loan. Although Tandem continues to remain current on its contractual obligations, the collection and timing of all future amounts owed is no longer reasonably assured. During the three months ended September 30, 2016 and 2015, the Company recognized interest income and received cash payments of $8 million from Tandem. During the nine months ended September 30, 2016 and 2015, the Company recognized interest income of $23 million and $22 million, respectively, and received cash payments of $23 million and $21 million, respectively, from Tandem. At September 30, 2016, the facility had an outstanding balance of $256 million at an 11.5% blended interest rate and was subordinate to $377 million of senior mortgage debt.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5066-111524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.3,4) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5162-111524 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5074-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 7 -Article 9 + Details
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