XML 22 R14.htm IDEA: XBRL DOCUMENT v3.25.3
Notes Payable and Derivatives
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Notes Payable and Derivatives

Note 4 – Notes Payable and Derivatives:

Additional information related to NNN's notes payable and derivatives is included in NNN's Annual Report on Form 10-K for the year ended December 31, 2024.

In June 2025, NNN filed a prospectus supplement to the prospectus contained in its August 2023 shelf registration
statement (see "Note 5 – Stockholders' Equity") and, in July 2025, issued $500,000,000 aggregate principal amount of 4.600% notes due February 2031 (the “2031 Notes”).

The 2031 Notes were sold at a discount with an aggregate net price of $495,910,000 with interest payable semi-annually on February 15 and August 15, commencing on February 15, 2026. The discount of $4,090,000 is being amortized to interest expense over the term of the 2031 Notes using the effective interest method. The effective interest rate for the 2031 Notes after accounting for the note discount is 4.766%.

NNN received approximately $491,710,000 of net proceeds in connection with the issuance of the 2031 Notes, after incurring debt issuance costs consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses, totaling $4,200,000 for the 2031 Notes.

The 2031 Notes are senior, unsecured obligations of NNN and are subordinated to all secured debt of NNN. NNN may redeem the 2031 Notes, in whole or in part, at any time prior to the par call date at the redemption price as set forth in the supplemental indenture dated July 1, 2025, relating to the 2031 Notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

NNN previously entered into two forward starting swaps with an aggregate notional amount of $200,000,000. The forward starting swaps were entered into to hedge the risk of changes in forecasted interest payments on a forecasted issuance of long-term debt. Upon pricing of the 2031 Notes, NNN terminated the forward starting swaps, designated as cash flow hedges, resulting in a net liability of $409,000, which was deferred in accumulated other comprehensive income and will be amortized as an increase in interest expense over 10 years.

As of September 30, 2025, $6,959,000 remained in accumulated other comprehensive income (loss) related to NNN's previously terminated interest rate hedges. During the nine months ended September 30, 2025 and 2024, NNN reclassified out of accumulated other comprehensive income (loss) $1,409,000 and $1,692,000, respectively, of which $480,000 and $450,000 was reclassified during the quarters ended September 30, 2025 and 2024, respectively, as an increase in interest expense. Over the next 12 months, NNN estimates that an additional $510,000 will be reclassified as an increase in interest expense. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on NNN's long-term debt.

NNN does not use derivatives for trading or speculative purposes. NNN had no derivative financial instruments outstanding at September 30, 2025.