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Loans Receivable | 12 Months Ended
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Dec. 31, 2016
Loans Receivable. |
Loans Receivable | NOTE 7. Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
|  | December 31, |
|  | 2016 |  | 2015 |
|  | Real Estate |  | Other |  |  |  |  | Real Estate |  | Other |  |  |  |
|  | Secured |  | Secured |  | Total |  | Secured |  | Secured |  | Total |
Mezzanine(1)(2) |  | $ | — |  | $ | 615,188 |  | $ | 615,188 |  | $ | — |  | $ | 660,138 |  | $ | 660,138 |
Other |  |  | 195,946 |  |  | — |  |  | 195,946 |  |  | 114,322 |  |  | — |  |  | 114,322 |
Unamortized premiums (discounts), fees and costs, net |  |  | 413 |  |  | (3,593) |  |  | (3,180) |  |  | 961 |  |  | (6,678) |  |  | (5,717) |
Allowance for loan losses |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | 196,359 |  | $ | 611,595 |  | $ | 807,954 |  | $ | 115,283 |  | $ | 653,460 |  | $ | 768,743 |
| (1) |  | At December 31, 2016, included £282 million ($348 million) outstanding and £2 million ($3 million) of associated unamortized discounts, fees and costs both related to the HC-One Facility. At December 31, 2015, included £273 million ($403 million) outstanding and £4 million ($5 million) of associated unamortized discounts, fees and costs both related to the HC-One Facility.
| (2) |  | At December 31, 2016, the Company had £35 million ($43 million) remaining under its commitments to fund development projects and capital expenditures under it U.K. development projects.
The following table summarizes the Company’s internal ratings for loans receivable at December 31, 2016 (dollars in thousands):
|  |  |  |  | Percentage |  | Internal Ratings |
|  | Carrying |  | of Loan |  | Performing |  | Watch List |  | Workout |
Investment Type |  | Amount |  | Portfolio |  | Loans |  | Loans |  | Loans |
Real estate secured |  | $ | 196,359 |  | 24 |  | $ | 196,359 |  | $ | — |  | $ | — |
Other secured |  |  | 611,595 |  | 76 |  |  | 355,130 |  |  | 256,465 |  |  | — |
|  | $ | 807,954 |  | 100 |  | $ | 551,489 |  | $ | 256,465 |  | $ | — |
Real Estate Secured Loans The following table summarizes the Company’s loans receivable secured by real estate at December 31, 2016 (dollars in thousands):
Final |  | Number |  |  |  |  |  |  |  |  |
Maturity |  | of |  |  |  | Principal |  | Carrying |
Date |  | Loans |  | Payment Terms |  | Amount(1) |  | Amount |
2017 |  | 1 |  | monthly interest-only payments, accrues interest at LIBOR plus 6.0%, and secured by, among other things, the issuer’s real estate assets |  | $ | 34,602 |  | $ | 35,015 |
2018 |  | 1 |  | monthly interest-only payments, accrues interest at 8.0% and secured by a senior housing facility in Pennsylvania(2) |  |  | 21,473 |  |  | 21,566 |
2021 |  | 2 |  | aggregate monthly interest-only payments, accrues interest at 8.0% and 9.75% and secured by two senior housing facility in the U.K.(3) |  |  | 9,008 |  |  | 9,339 |
2023 |  | 1 |  | monthly interest-only payments, accrues interest at 7.0% and secured by seven senior housing facilities in the U.K. |  |  | 130,439 |  |  | 130,439 |
|  | 5 |  |  |  | $ | 195,522 |  | $ | 196,359 |
| (1) |  | Represents future contractual principal payments to be received on loans receivable secured by real estate.
| (2) |  | Represents commitments to fund an aggregate of $0.1 million for a development project that is at or near completion as of December 31, 2016.
| (3) |  | Represents commitments to fund an aggregate of £12 million ($15 million) for two development projects as of December 31, 2016.
During the year ended December 31, 2016, the Company recognized $26 million in interest income related to loans secured by real estate. 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. The HC-One Facility has a five-year term and was funded by a £355 million draw on the Company’s revolving line of credit facility that is discussed in Note 11. 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. (see Note 4). 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 pay down of £34 million from disposition proceeds without a prepayment premium and (ii) the spin-off of 36 properties into a separate joint venture. In return, the Company retained security over the spin-off properties for a period of two years. Through the year ended December 31, 2015, the Company received paydowns of £34 million ($52 million). At December 31, 2016, the HC-One Facility had an outstanding balance of $345 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. Due to a 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 payment obligations, the collection and timing of all future amounts owed is no longer reasonably assured. During the year ended December 31, 2016, 2015 and 2014, the Company recognized interest income of $31 million, $29 million and $27 million, respectively, and received cash payments of $30 million, $29 million and $27 million, respectively, from Tandem. At December 31, 2016, the facility had an outstanding balance of $256 million at an 11.5% blended interest rate and was subordinate to $374 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=66008989&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(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 946 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(6)) -URI http://asc.fasb.org/extlink&oid=6488278&loc=d3e603758-122996 Reference 4: 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)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: 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=66008989&loc=d3e5162-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03(a)(5)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(7)) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 8: 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=66008989&loc=d3e5074-111524 + Details
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