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v3.24.3

Debt | 9 Months Ended
--- | ---
Sep. 30, 2024
Debt Instruments [Abstract] |
Debt | Debt Debt consisted of the following ($ in thousands):
| September 30, 2024 |  | December 31, 2023
Revolving credit facility - unsecured | $ | 319,000 |  |  | $ | 245,000 |
Bank term loans - unsecured | 200,000 |  |  | 200,000 |
2031 Senior Notes - unsecured, net of discount of $2,037 and $2,278 | 397,963 |  |  | 397,722 |
Private placement notes - unsecured | 150,000 |  |  | 225,000 |
Fannie Mae term loans - secured, non-recourse | 75,925 |  |  | 76,241 |
Unamortized loan costs | (6,586) |  |  | (8,912) |
| $ | 1,136,302 |  |  | $ | 1,135,051 |
Aggregate principal maturities of debt as of September 30, 2024 were as follows ($ in thousands):
Remainder of 2024 | $ | 425 |
2025 | 325,500 |
2026 | 319,000 |
2027 | 100,000 |
2028 | — |
2029 | — |
Thereafter | 400,000 |
| 1,144,925 |
Less: discount | (2,037) |
Less: unamortized loan costs | (6,586) |
| $ | 1,136,302 |
Unsecured revolving credit facility and bank term loan We have a $700.0 million unsecured revolving credit facility (the “2022 Credit Facility”), which as amended and restated on October 24, 2024 to extend the maturity date from March 2026 to October 2028, which may be further extended by us pursuant to (i) one or both of the two six-month extension extension options or (ii) one twelve-month extension option. Borrowings under the 2022 Credit Facility bear interest, at our election, at one of the following (i) Term Secured Overnight Financing Rate (“SOFR”) (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, (ii) Daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or (iii) the base rate plus a margin ranging from 0.00% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (x) the agent’s prime rate, (y) the federal funds rate on such day plus 0.50% or (z) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.0%. In addition, the 2022 Credit Facility requires a facility fee equal to 0.125% to 0.30%, based on our credit rating on the $700.0 million committed capacity, without regard to usage. At September 30, 2024, we had $381.0 million available to draw on the 2022 Credit Facility, subject to usual and customary covenants. Among other stipulations, the credit agreement for the 2022 Credit Facility requires that we maintain certain financial ratios within limits set by our creditors. At September 30, 2024, we were in compliance with these ratios. We have a $200.0 million term loan (the “2025 Term Loan”) that matures June 2025 and bears interest at a variable rate which is SOFR-based with a margin determined according to our credit ratings plus a 0.10% credit spread adjustment. Concurrently with the amendment and restatement of our unsecured revolving credit agreement, we amended the terms of the term loan agreement for the 2025 Term Loans to, among other things, modify the representations, covenants, financial covenants, and events of default to align with the same provisions in amended and restated unsecured revolving credit agreement. Pinnacle Bank is a participating member of our banking group. A member of NHI’s Board of Directors and chairperson of the Audit Committee of the Board of Directors is also the chairman of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. NHI’s local banking transactions are conducted primarily through Pinnacle Bank. 2031 Senior Notes In January 2021, we issued $400.0 million in aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”). The 2031 Senior Notes were sold at an issue price of 99.196% of face value before the underwriters’ discount. Our net proceeds from the 2031 Senior Notes offering, after deducting underwriting discounts and expenses, were approximately $392.3 million. The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants with which we were in compliance at September 30, 2024. Private Placement Notes In September 2024, we repaid the $75.0 million of the private placement notes due September 2024 primarily with proceeds from the 2022 Credit Facility. Our unsecured private placement notes outstanding as of September 30, 2024, payable interest only, are summarized below ($ in thousands):
Amount |  | Inception |  | Maturity |  | Fixed Rate
$ | 50,000 |  |  | November 2015 |  | November 2025 |  | 4.33%
100,000 |  |  | January 2015 |  | January 2027 |  | 4.51%
$ | 150,000 |  |  |  |  |  |  |
Covenants pertaining to the unsecured private placement notes are generally conformed with those governing our 2022 Credit Facility, except for specific debt-coverage ratios that are more restrictive. Our unsecured private placement notes include a rate increase provision that is effective if any rating agency lowers our credit rating on our senior unsecured debt below investment grade and our compliance leverage increases to 50% or more. Fannie Mae Term Loans As of September 30, 2024, we had $60.1 million in Fannie Mae term-debt mortgage financing that originated in March 2015, requiring interest-only payments at an annual rate of 3.79% with a 10-year maturity. The mortgages are non-recourse and secured by 11 properties leased to Bickford. In a December 2017 acquisition, we assumed additional Fannie Mae debt that amortizes through 2025 when a balloon payment will be due, bears interest at a rate of 4.60%, and has a remaining balance of $15.8 million at September 30, 2024. Collectively, the Fannie Mae debt is secured by properties having a net book value of $98.8 million at September 30, 2024. Interest Expense The following table summarizes interest expense ($ in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Interest expense on debt at contractual rates | $ | 14,131 |  |  | $ | 14,387 |  |  | $ | 42,247 |  |  | $ | 41,439 |
Capitalized interest | (65) |  |  | (21) |  |  | (152) |  |  | (61) |
Amortization of debt issuance costs, debt discount and other | 873 |  |  | 720 |  |  | 2,568 |  |  | 1,930 |
Total interest expense | $ | 14,939 |  |  | $ | 15,086 |  |  | $ | 44,663 |  |  | $ | 43,308 |

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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/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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