Borrowing Arrangements

9 Months Ended

Sep. 30, 2019

Mortgage Notes Payable

2019 Activity

During the three months ended March 31, 2019, we defeased mortgage debt of $11.2 million in conjunction with the disposition of the five MH Properties as disclosed in Note 6. Investment in Real Estate. These loans had a weighted average interest rate of 5.0% per annum.

During the three months ended June 30, 2019, we prepaid four loans secured by four properties (three MH and one RV), which were scheduled to mature in 2020. The loans had an outstanding principal balance of $66.8 million and a weighted average interest rate of 6.9% per annum. As part of the transaction, we incurred $1.4 million of prepayment penalties. We used the proceeds from the ATM and our available cash to fund the loan payments.

In connection with the acquisitions that closed during the nine months ended September 30, 2019, we assumed mortgage debt of $18.6 million, excluding mortgage note premium of $0.6 million. These loans carry a weighted average interest rate of 5.4% per annum and mature between 2022 and 2024.

2018 Activity

During the nine months ended September 30, 2018, we closed on one loan, secured by two RV communities, for gross proceeds of approximately $64.0 million. The loan carries an interest rate of 4.8% per annum and matures in 2038.

In connection with the Serendipity acquisition that closed during the nine months ended September 30, 2018, we assumed a loan of approximately $9.2 million and obtained additional financing of $8.8 million for total mortgage debt, secured by the MH community, of $18.0 million. These loans carry a weighted average interest rate of 4.8% and mature in 2039.

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:



	As of September 30, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,285,061	$	2,086,202	$	2,164,563	$	2,174,715

The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of September 30, 2019, was approximately 4.5% per annum. The debt bears interest at stated rates ranging from 3.5% to 8.9% per annum and matures on various dates ranging from 2020 to 2041. The debt encumbered a total of 116 and 118 of our Properties as of September 30, 2019 and December 31, 2018, respectively, and the carrying value of such Properties was approximately $2,488.9 million and $2,489.8 million, as of September 30, 2019 and December 31, 2018, respectively.

Unsecured Line of Credit

During the nine months ended September 30, 2019, we paid off and borrowed amounts on our unsecured Line of Credit ("LOC"), leaving a balance of $120.0 million outstanding as of September 30, 2019. As of September 30, 2019, our LOC has a remaining borrowing capacity of $280.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions.

As of September 30, 2019, we were in compliance in all material respects with the covenants in all our borrowing arrangements.