XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.20.2

Debt | 9 Months Ended
--- | ---
Sep. 30, 2020
Debt Disclosure [Abstract] |
Debt | Debt The Company’s outstanding indebtedness as of September 30, 2020 and December 31, 2019 is as follows (in thousands):
|  |  |  | September 30, 2020 | December 31, 2019
Indebtedness | Stated Maturity Date | Contractual Interest Rate | Effective Interest Rate as of September 30, 2020 | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value
2013 Mortgage Loans |  |  |  |  |
Senior note | 5/2023 | 3.81% | 4.14% | $ | 176,416 |  | $ | 181,707 |  | $ | 181,443 |  | $ | 184,618 |
Mezzanine A | 5/2023 | 7.38% | 7.55% | 70,000 |  | 71,575 |  | 70,000 |  | 70,525 |
Mezzanine B | 5/2023 | 11.50% | 11.75% | 32,000 |  | 32,880 |  | 32,000 |  | 32,320 |
Total 2013 Mortgage Loans |  |  |  | 278,416 |  | 286,162 |  | 283,443 |  | 287,463 |
Senior Unsecured Notes |  |  |  |  |  |  |
Series A 4.68% notes due 2026 | 1/2026 | 4.68% | 4.77% | 200,000 |  | 230,000 |  | 200,000 |  | 217,750 |
Series B 4.86% notes due 2029 | 1/2029 | 4.86% | 4.92% | 400,000 |  | 476,000 |  | 400,000 |  | 439,000 |
Series C 4.10% notes due 2030 | 1/2030 | 4.10% | 4.15% | 350,000 |  | 401,625 |  | 350,000 |  | 366,625 |
Total Senior Unsecured Notes |  |  |  | 950,000 |  | 1,107,625 |  | 950,000 |  | 1,023,375 |
2020 Senior Unsecured Term Loan Tranche A-1(1) | 3/2025 | L+0.95% | 2.64% | 425,000 |  | 420,750 |  | — |  | — |
2020 Senior Unsecured Term Loan Tranche A-2(2)(6) | 3/2025 | C+0.95% | 1.57% | 187,675 |  | 185,798 |  | — |  | — |
Total 2020 Senior Unsecured Term Loan A Facility(4) |  | 612,675 |  | 606,548 |  | — |  | — |
2018 Senior Unsecured Term Loan A Facility(1)(4) | 1/2023 | L+1.00% | 3.14% | — |  | — |  | 475,000 |  | 472,625 |
Total principal amount of indebtedness | $ | 1,841,091 |  | $ | 2,000,335 |  | $ | 1,708,443 |  | $ | 1,783,463 |
Less: unamortized deferred financing costs |  |  |  | (13,607) |  | n/a | (12,996) |  | n/a
Total indebtedness, net of unamortized deferred financing costs(3) | $ | 1,827,484 |  | $ | 2,000,335 |  | $ | 1,695,447 |  | $ | 1,783,463 |
2020 Senior Unsecured Revolving Credit Facility(3)(5) | 3/2024 | L+0.85% | 0.23% | $ | — |  | $ | — |  | N/A | N/A
2018 Senior Unsecured Revolving Credit Facility(1) (3) | 1/2021 | L+0.90% | 0.36% | N/A | N/A | $ | — |  | $ | — |
(1) L = one-month LIBOR. (2) C = one-month CDOR. (3) During the first quarter of 2020, the Company refinanced its Senior Unsecured Credit Facility. As such, the 2020 Senior Unsecured Revolving Credit Facility was in effect as of September 30, 2020 and the 2018 Senior Unsecured Revolving Credit Facility was in effect as of December 31, 2019. The above disclosure reflects N/A for the reporting date that the respective instrument was not in effect. (4) During the first quarter of 2020, the Company refinanced its Senior Unsecured Term Loan A. As such, the 2020 Senior Unsecured Term Loan A Facility was in effect as of September 30, 2020 and the 2018 Senior Unsecured Term Loan A Facility was in effect as of December 31, 2019. (5) The Company has the option to extend the 2020 Senior Unsecured Revolving Credit Facility up to two times for a six-month period each. (6) The 2020 Senior Unsecured Term Loan Tranche A-2 is denominated in Canadian dollars and aggregates to CAD $250.0 million. The carrying value in the table above is the US dollar equivalent as of September 30, 2020. 2020 Senior Unsecured Credit Facility On March 26, 2020, we entered into a five-year Senior Unsecured Term Loan A Facility and a four-year $800 million Senior Unsecured Revolving Credit Facility, which we refer to as the 2020 Senior Unsecured Credit Facility. The proceeds were used to refinance the existing $800 million 2018 Senior Unsecured Revolving Credit Facility maturing January 23, 2021 and USD denominated $475 million 2018 Senior Unsecured Term Loan maturing January 23, 2023. The total borrowing capacity of the 2020 Senior Unsecured Credit Facility is approximately $1.4 billion USD. The Company reduced the margin on the 2020 Senior Unsecured Term Loan A Facility and 2020 Senior Unsecured Revolving Credit Facility by five basis points. The 2020 Senior Unsecured Term Loan A Facility is broken into two tranches. Tranche A-1 is comprised of a $425.0 million USD term loan and Tranche A-2 is comprised of a CAD $250.0 million term loan, both are five-year loans maturing in 2025. Tranche A-2 provides a natural hedge to the Company’s investment in Canada. We refer to Tranches A-1 and A-2 in aggregate as the 2020 Senior Unsecured Term Loan Facility. In connection with entering into the agreement, we capitalized approximately $3.2 million of debt issuance costs related to the term loan, which we amortize as interest expense under the effective interest method. As of September 30, 2020, $7.4 million of unamortized debt issuance costs related to the 2020 Senior Unsecured Term Loan A Facility are included in “Mortgage notes, senior unsecured notes and term loans” in the accompanying Condensed Consolidated Balance Sheets. The maturity of the 2020 Senior Unsecured Revolving Credit Facility is March, 26 2024; however, the Company has the option to extend the maturity up to two times, each for a six-month period. The Company must meet certain criteria in order to extend the maturity. All representations and warranties must be in effect, it must obtain updated resolutions from loan parties, and an additional 6.25 basis points extension fee must be paid. In connection with entering into the agreement, we capitalized approximately $5.2 million of debt issuance costs for the 2020 Senior Unsecured Revolving Credit Facility, which we amortize as interest expense under the straight-line method. Unamortized deferred financing costs as of December 31, 2019 of $2.8 million will continue to be amortized over the life of the 2020 Senior Unsecured Revolving Credit Facility. As of September 30, 2020, $6.3 million of unamortized debt issuance costs related to the revolving credit facility are included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets. Our 2020 Senior Unsecured Credit Facility contains representations, covenants and other terms customary for a publicly traded REIT. In addition, it contains certain financial covenants, as defined in the credit agreement, including: •a maximum leverage ratio of less than or equal to 60% of our total asset value. Following a material acquisition, leverage ratio shall not exceed 65%; •a maximum unencumbered leverage ratio of less than or equal to 60% to unencumbered asset value. Following a material acquisition, unencumbered leverage ratio shall not exceed 65%; •a maximum secured leverage ratio of less than or equal to 40% to total asset value. Following a material acquisition, secured leverage ratio shall not exceed 45%; •a minimum fixed charge coverage ratio of greater than or equal to 1.50x; and •a minimum unsecured interest coverage ratio of greater than or equal to 1.75x. Material Acquisition in our 2020 Senior Unsecured Credit Facility is defined as one in which assets acquired exceeds an amount equal to 5% of total asset value as of the last day of the most recently ended fiscal quarter publicly available. Obligations under our 2020 Senior Unsecured Credit Facility are general unsecured obligations of our Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. As of September 30, 2020, the Company was in compliance with all debt covenants. There were $21.0 million letters of credit issued on the Company’s 2020 Senior Unsecured Revolving Credit Facility as of September 30, 2020. 2018 Senior Unsecured Credit Facility On December 4, 2018, we entered into the 2018 Senior Unsecured Credit Facility to, among other things, (i) increase the revolver borrowing capacity from $450.0 million to $800.0 million, (ii) convert the credit facility (term loan and revolver) from a secured credit facility to an unsecured credit facility, and (iii) decrease the applicable interest rate margins from 2.35% to 1.45% and decrease the fee on unused borrowing capacity by five basis points. The terms of the revolver allow for the ability to draw proceeds in multiple currencies, up to $400 million. In connection with entering into the original agreement and subsequent amendments for the Term Loan A Credit Facility, we capitalized approximately $8.9 million of debt issuance costs, which we amortize as interest expense under the effective interest method. As of December 31, 2019, the unamortized balance of Term Loan A debt issuance costs was $6.1 million and was included in “Mortgage notes, senior unsecured notes and term loans” on the accompanying Condensed Consolidated Balance Sheets. On September 24, 2019, we reduced our interest rate margins from 1.45% to 1.00% and decreased the fee on unused borrowing capacity by five basis points for usage greater than 50% of the total commitment and 15 basis points for usage less than 50% of commitment. The fee for unused borrowing capacity was 20 basis points regardless of the percentage of total commitment used. During the third quarter of 2019, the Company received a favorable credit rating. This rating, when combined with existing ratings, allowed the Company to transition to a favorable ratings-based pricing grid during the third quarter of 2019. There were $23.0 million letters of credit issued on the Company’s 2018 Senior Unsecured Revolving Credit Facility as of December 31, 2019. During the first quarter of 2020, the 2018 Senior Unsecured Revolving Credit Facility was refinanced and is no longer outstanding as of September 30, 2020. Series A, B and C Senior Unsecured Notes On April 26, 2019, we priced a debt private placement transaction consisting of $350.0 million senior unsecured notes with a coupon of 4.10% due January 8, 2030 (“Series C”). The transaction closed on May 7, 2019. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring January 8, 2020. The initial January 8, 2020 payment included interest accrued since May 7, 2019. The notes are general unsecured obligations of the Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. The Company applied the proceeds of the private placement transaction to repay the indebtedness outstanding under our senior unsecured revolving credit facility incurred in connection with the funding of the Cloverleaf and Lanier acquisitions. On November 6, 2018, we priced a debt private placement transaction consisting of (i) $200.0 million senior unsecured notes with a coupon of 4.68% due January 8, 2026 (“Series A”) and (ii) $400.0 million senior unsecured notes with a coupon of 4.86% due January 8, 2029 (“Series B”). The transaction closed on December 4, 2018. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring July 8, 2019. The notes are general unsecured senior obligations of the Operating Partnership and are guaranteed by the Company and certain subsidiaries of the Company. The Company used a portion of the proceeds of the private placement transaction to repay the outstanding balances of the $600.0 million Americold 2010 LLC Trust, Commercial Mortgage Pass-Through Certificates, Series 2010, ART (2010 Mortgage Loans). The Company also used the remaining proceeds to extinguish the Australian term loan and the New Zealand term loan (ANZ Loans). The Series A, Series B, and Series C senior notes (collectively referred to as the “Senior Unsecured Notes”) and guarantee agreement includes a prepayment option executable at any time during the term of the loans. The prepayment can be either a partial payment or payment in full, as long as the partial payment is at least 5% of the outstanding principal. Any prepayment in full must include a make-whole amount, which is the discounted remaining scheduled payments due to the lender. The discount rate to be used is equal to 0.50% plus the yield to maturity reported for the most recently actively traded U.S. Treasury Securities with a maturity equal to the remaining average life of the prepaid principal. The Company must give each lender at least 10 days written notice whenever it intends to prepay any portion of the debt. If a change in control occurs for the Company, the Company must issue an offer to prepay the remaining portion of the debt to the lenders. The prepayment amount will be 100% of the principal amount, as well as accrued and unpaid interest. The Company is required to maintain at all times an investment grade debt rating for each series of notes from a nationally recognized statistical rating organization. In addition, the Senior Unsecured Notes contain certain financial covenants required on a quarterly or occurrence basis, as defined in the credit agreement, including: •a maximum leverage ratio of less than or equal to 60% of our total asset value; •a maximum unsecured indebtedness to qualified assets ratio of less than 0.60 to 1.00; •a maximum total secured indebtedness ratio of less than 0.40 to 1.00; •a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00; and •a minimum unsecured debt service ratio of greater than or equal to 2.00 to 1.00. As of September 30, 2020, the Company was in compliance with all debt covenants. 2013 Mortgage Loans On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which the Company refers to as the 2013 Mortgage Loans. The debt consists of a senior debt note and two mezzanine notes. The components are cross-collateralized and cross-defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the two mezzanine notes remain subject to yield maintenance provisions. The Company used the net proceeds of these loans to refinance certain of the 2006 Mortgage Loans, acquire two warehouses, and fund general corporate purposes. The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of September 30, 2020, the amount of restricted cash associated with the 2013 Mortgage Loans was $4.0 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The 2013 Mortgage Loans are non-recourse to the Company, subject to customary non-recourse provisions as stipulated in the agreements. The mortgage loan also requires compliance with other financial covenants, including a debt coverage ratio and cash flow calculation, as defined. As of September 30, 2020, the Company was in compliance with all debt covenants. Debt Covenants Our Senior Unsecured Credit Facilities, the Senior Unsecured Notes and 2013 Mortgage Loans all require financial statement reporting, periodic reporting of compliance with financial covenants, other established thresholds and performance measurements, and compliance with affirmative and negative covenants that govern our allowable business practices. The affirmative and negative covenants include, among others, continuation of insurance, maintenance of collateral (in the case of the 2013 Mortgage Loans), the maintenance of REIT status, and restrictions on our ability to enter into certain types of transactions or take on certain exposures. As of September 30, 2020, we were in compliance with all debt covenants. Loss on debt extinguishment and modifications In connection with the refinancing of the 2018 Senior Unsecured Credit Facility during the first quarter of 2020, the Company recorded $0.8 million to “Loss on debt extinguishment and modifications” in the accompanying Condensed Consolidated Statements of Operations, representing the write-off of unamortized deferred financing costs from the 2018 Senior Unsecured Credit Facility. These write-offs were a result of two lenders in the 2018 Senior Unsecured Term Loan A Facility that did not participate in the 2020 Senior Unsecured Term Loan A Facility, accordingly those lenders’ portion of unamortized deferred financing costs were written off. Similarly, two lenders in the 2018 Senior Unsecured Revolving Credit Facility did not participate in the 2020 Senior Unsecured Revolving Credit Facility, and those lender’s portions of unamortized deferred financing costs were written off. Aggregate future repayments of indebtedness The aggregate maturities of the Company’s total indebtedness as of September 30, 2020, including amortization of principal amounts due under the mortgage notes, for each of the next five years and thereafter, are as follows:
As of September 30, 2020: | (In thousands)
September 30, 2021 | $ | 6,967
September 30, 2022 | 7,242
September 30, 2023 | 264,206
September 30, 2024 | — |
September 30, 2025 | 612,676
Thereafter | 950,000
Aggregate principal amount of debt | 1,841,091
Less unamortized deferred financing costs | (13,607) |
Total debt net of unamortized deferred financing costs | $ | 1,827,484

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration