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Debt | 9 Months Ended
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Sep. 30, 2016
Debt |
Debt | NOTE 10. Debt Bank Line of Credit and Term Loans The Company’s $2.0 billion unsecured revolving line of credit facility (the “Facility”) matures on March 31, 2018 and contains a one-year extension option. Borrowings under the Facility accrue interest at LIBOR plus a margin that depends on the Company’s credit ratings. The Company pays a facility fee on the entire revolving commitment that depends on its credit ratings. Based on the Company’s credit ratings at September 30, 2016, the margin on the Facility was 1.05%, and the facility fee was 0.20%. The Facility also includes a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $500 million, subject to securing additional commitments from existing lenders or new lending institutions. At September 30, 2016, the Company had $1.4 billion, including £275 million ($357 million), outstanding under the Facility with a weighted average effective interest rate of 1.85%. In July 2016, the Company exercised a one-year extension option on its £137 million ($178 million at September 30, 2016), four-year unsecured term loan that it entered into on July 30, 2012 (the “2012 Term Loan”). Based on the Company’s credit ratings at September 30, 2016, the 2012 Term Loan accrues interest at a rate of GBP LIBOR plus 1.40%. The Company also has a £220 million ($286 million at September 30, 2016) four-year unsecured term loan that accrues interest at a rate of GBP LIBOR plus 1.15%, subject to adjustments based on the Company’s credit ratings. The Facility and term loans contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements, (i) limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) limit the ratio of Secured Debt to Consolidated Total Asset Value to 30%, (iii) limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 60% and (iv) require a minimum Fixed Charge Coverage ratio of 1.5x. The Facility and term loans also require a Minimum Consolidated Tangible Net Worth of $9.5 billion at September 30, 2016, which requirement was subsequently reduced, via an amendment to the Facility, to $6.5 billion effective upon the completion of the Spin-Off of QCP on October 31, 2016. At September 30, 2016, the Company was in compliance with each of these restrictions and requirements. Senior Unsecured Notes At September 30, 2016, the Company had senior unsecured notes outstanding with an aggregate principal balance of $8.3 billion. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at September 30, 2016. The following table summarizes the Company’s senior unsecured notes issuances for the periods presented (dollars in thousands):
|  | Issuance |  |  |  |  |  |  |
Period |  | Amount |  | Coupon Rate |  | Maturity Date |  | Net Proceeds
Year ended December 31, 2015: |  |  |  |  |  |  |  |  |
January 21, 2015 |  | $ | 600,000 |  |  | 3.400 | % |  | 2025 |  | $ | 591,000
May 20, 2015 |  | $ | 750,000 |  |  | 4.000 | % |  | 2025 |  | $ | 739,000
December 1, 2015 |  | $ | 600,000 |  |  | 4.000 | % |  | 2022 |  | $ | 594,000
The following table summarizes the Company’s senior unsecured notes payoffs for the periods presented (dollars in thousands):
Period |  | Amount |  | Coupon Rate |
Nine months ended September 30, 2016: |  |  |  |  |  |  |
February 1, 2016 |  | $ | 500,000 |  |  | 3.750 | %
September 15, 2016 |  | $ | 400,000 |  |  | 6.300 | %
Year ended December 31, 2015: |  |  |  |
March 1, 2015 |  | $ | 200,000 |  |  | 6.000 | %
June 8, 2015 |  | $ | 200,000 |  |  | 7.072 | %
Mortgage Debt At September 30, 2016, the Company had mortgage debt outstanding with an aggregate principal balance of $758 million, which is secured by 46 healthcare facilities (including redevelopment properties) with a carrying value of $1.1 billion. Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires maintenance of insurance on the assets and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt is also cross-collateralized by multiple assets and may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets. Debt Maturities The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, 2016 (in thousands):
|  |  |  |  |  |  |  | Senior |  |  |  |  |  |  |
|  | Bank Line of |  |  |  |  | Unsecured |  | Mortgage |  |  |  |
Year |  | Credit(1) |  | Term Loans(2) |  | Notes(3) |  | Debt(4) |  | Total(5) |
2016 (three months) |  | $ | — |  | $ | — |  | $ | — |  | $ | 30,626 |  | $ | 30,626 |
2017 |  |  | — |  |  | 177,867 |  |  | 750,000 |  |  | 583,541 |  |  | 1,511,408 |
2018 |  |  | 1,372,032 |  |  | — |  |  | 600,000 |  |  | 8,290 |  |  | 1,980,322 |
2019 |  |  | — |  |  | 285,626 |  |  | 450,000 |  |  | 3,839 |  |  | 739,465 |
2020 |  |  | — |  |  | — |  |  | 800,000 |  |  | 3,907 |  |  | 803,907 |
Thereafter |  |  | — |  |  | — |  |  | 5,700,000 |  |  | 127,758 |  |  | 5,827,758 |
|  |  | 1,372,032 |  |  | 463,493 |  |  | 8,300,000 |  |  | 757,961 |  |  | 10,893,486 |
(Discounts), premiums and debt costs, net |  |  | — |  |  | (1,312) |  |  | (70,269) |  |  | 4,754 |  |  | (66,827) |
|  | $ | 1,372,032 |  | $ | 462,181 |  | $ | 8,229,731 |  | $ | 762,715 |  | $ | 10,826,659 |
| (1) |  | Includes £275 million ($357 million) translated into U.S. dollars (“USD”).
| (2) |  | Represents £357 million translated into USD.
| (3) |  | Effective interest rates on senior unsecured notes ranged from 2.79% to 6.88% with a weighted average effective interest rate of 4.63% and a weighted average maturity of six years.
| (4) |  | Effective interest rates on the mortgage debt ranged from 3.05% to 8.20% with a weighted average effective interest rate of 5.79% and a weighted average maturity of five years.
| (5) |  | Excludes $94 million of other debt that represents Life Care Bonds and Demand Notes (each as defined below) that have no scheduled maturities.
Other Debt At September 30, 2016, the Company had $66 million of non-interest bearing life care bonds at two of its CCRCs and non-interest bearing occupancy fee deposits at three of its senior housing facilities, all of which are payable to certain residents of the facilities (collectively, “Life Care Bonds”). The Life Care Bonds are generally refundable to the residents upon the termination of the contract or upon the successful resale of the unit. At September 30, 2016, the Company had $28 million of on-demand notes (“Demand Notes”) from the CCRC JV. The Demand Notes bear interest at a rate of 4.5%.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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