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Debt | 9 Months Ended
--- | ---
Sep. 30, 2016
Debt Disclosure [Abstract] |
Debt | Debt Debt consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands):
|  |  |  |  | As of September 30, 2016 |
| Principal Balance as of September 30, 2016 |  | Principal Balance as of December 31, 2015 |  | Stated Rate |  | Effective Rate(1) |  | Maturity Date(2) |
Mortgage debt collateralized by: |  |  |  |  |  |  |  |  |  |
Fixed rate mortgage debt |  |  |  |  |  |  |  |  |  |
10 Bank Street | $ | 31,715 |  |  | $ | 32,214 |  |  | 5.72 | % |  | 6.22 | % |  | 6/1/2017 |
1542 Third Avenue | 17,906 |  |  | 18,222 |  |  | 5.90 | % |  | 6.61 | % |  | 6/1/2017 |
First Stamford Place | 236,030 |  |  | 238,765 |  |  | 5.65 | % |  | 6.17 | % |  | 7/5/2017 |
1010 Third Avenue and 77 West 55th Street | 26,646 |  |  | 27,064 |  |  | 5.69 | % |  | 6.39 | % |  | 7/5/2017 |
383 Main Avenue | 28,811 |  |  | 29,269 |  |  | 5.59 | % |  | 6.04 | % |  | 7/5/2017 |
1333 Broadway | 67,909 |  |  | 68,646 |  |  | 6.32 | % |  | 3.76 | % |  | 1/5/2018 |
1400 Broadway |  |  |  |  |  |  |  |  |  |
(first lien mortgage loan) | 67,974 |  |  | 68,732 |  |  | 6.12 | % |  | 3.41 | % |  | 2/5/2018 |
(second lien mortgage loan) | 9,442 |  |  | 9,600 |  |  | 3.35 | % |  | 3.36 | % |  | 2/5/2018 |
112 West 34th Street |  |  |  |  |  |  |  |  |  |
(first lien mortgage loan) | 75,554 |  |  | 76,406 |  |  | 6.01 | % |  | 3.36 | % |  | 4/5/2018 |
(second lien mortgage loan) | 9,543 |  |  | 9,640 |  |  | 6.56 | % |  | 3.67 | % |  | 4/5/2018 |
1350 Broadway | 37,913 |  |  | 38,348 |  |  | 5.87 | % |  | 3.74 | % |  | 4/5/2018 |
Metro Center | 96,483 |  |  | 97,950 |  |  | 3.59 | % |  | 3.66 | % |  | 11/5/2024 |
10 Union Square (3) | 50,000 |  |  | 20,289 |  |  | 3.70 | % |  | 4.00 | % |  | 4/1/2026 |
Total mortgage debt | 755,926 |  |  | 735,145 |  |  |  |  |  |  |  |
Senior unsecured notes - exchangeable | 250,000 |  |  | 250,000 |  |  | 2.63 | % |  | 3.93 | % |  | 8/15/2019 |
Senior unsecured notes: |  |  |  |  |  |  |  |  |  |  |  |
Series A | 100,000 |  |  | 100,000 |  |  | 3.93 | % |  | 4.02 | % |  | 3/27/2025 |
Series B | 125,000 |  |  | 125,000 |  |  | 4.09 | % |  | 4.18 | % |  | 3/27/2027 |
Series C | 125,000 |  |  | 125,000 |  |  | 4.18 | % |  | 4.27 | % |  | 3/27/2030 |
Unsecured revolving credit facility | — |  |  | 40,000 |  |  | (4) |  | (4) |  | 1/23/2019 |
Unsecured term loan facility | 265,000 |  |  | 265,000 |  |  | (5) |  | (5) |  | 8/24/2022 |
Total principal | 1,620,926 |  |  | 1,640,145 |  |  |  |  |  |  |  |
Unamortized premiums, net of unamortized discount | 1,974 |  |  | 5,181 |  |  |  |  |  |  |  |
Deferred financing costs, net | (7,067 | ) |  | (12,910 | ) |  |  |  |  |  |  |
Total | $ | 1,615,833 |  |  | $ | 1,632,416 |  |  |  |  |  |  |  |
______________
(1) | The effective rate is the yield as of September 30, 2016, including the effects of debt issuance costs and the amortization of the fair value of debt adjustment.
(2) | Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.
(3) | The mortgage loan collateralized by 10 Union Square was refinanced in March 2016.
(4) | At September 30, 2016, the unsecured revolving credit facility bears a floating rate at 30 day LIBOR plus 1.15%. The rate at September 30, 2016 was 1.68%.
(5) | The unsecured term loan facility bears a floating rate at 30 day LIBOR plus 1.60%. The rate at September 30, 2016 was 2.13%. Pursuant to a forward interest rate swap agreement, the LIBOR rate is fixed at 2.1485% for the period beginning on August 31, 2017 through maturity.
Principal Payments Aggregate required principal payments at September 30, 2016 are as follows (amounts in thousands):
Year | Amortization |  | Maturities |  | Total
2016 | $ | 3,086 |  |  | $ | — |  |  | $ | 3,086 |
2017 | 9,904 |  |  | 336,009 |  |  | 345,913 |
2018 | 2,880 |  |  | 262,210 |  |  | 265,090 |
2019 | 2,188 |  |  | 250,000 |  |  | 252,188 |
2020 | 2,268 |  |  | — |  |  | 2,268 |
Thereafter | 9,706 |  |  | 742,675 |  |  | 752,381 |
Total | $ | 30,032 |  |  | $ | 1,590,894 |  |  | $ | 1,620,926 |
Deferred Financing Costs Deferred financing costs, net, consisted of the following at September 30, 2016 and December 31, 2015 (amounts in thousands):
|  | September 30, 2016 |  | December 31, 2015
Financing costs |  | $ | 23,044 |  |  | $ | 20,882 |
Less: accumulated amortization |  | (10,949 | ) |  | (7,972 | )
Total deferred financing costs, net |  | $ | 12,095 |  |  | $ | 12,910 |
Amortization expense related to deferred financing costs was $1.3 million and $1.1 million for the three months ended September 30, 2016 and 2015, respectively, and $3.7 million and $5.0 million for the nine months ended September 30, 2016 and 2015, respectively, and was included in interest expense. At September 30, 2016, $5.0 million of net deferred financing costs associated with the unsecured revolving credit facility was included in deferred costs, net on the condensed consolidated balance sheet. Unsecured Revolving Credit Facility On January 23, 2015, we entered into an unsecured revolving credit agreement, which is referred to herein as the “unsecured revolving credit facility,” with Bank of America, Merrill Lynch, Goldman Sachs and the other lenders party thereto. Merrill Lynch acted as joint lead arranger; Bank of America acted as administrative agent; and Goldman Sachs acted as syndication agent and joint lead arranger. Concurrently with entering into the unsecured revolving credit facility, on January 23, 2015, we terminated our secured revolving and term credit facility and wrote off $1.3 million of deferred financing costs. In connection with the termination of the secured revolving and term credit facility, all of the guarantors thereunder were released from their guaranty obligations, all liens created thereby were terminated, and all collateral pledged thereunder was released. The unsecured revolving credit facility is comprised of a revolving credit facility in the maximum original principal amount of $800.0 million. The unsecured revolving credit facility contains an accordion feature that would allow us to increase the maximum aggregate principal amount to $1.25 billion under specified circumstances. On July 6, 2016, we partially exercised the accordion feature and increased our committed borrowing capacity under the unsecured revolving credit facility from $800 million to $1.1 billion. Amounts outstanding under the unsecured revolving credit facility bear interest at a floating rate equal to, at our election, (x) a Eurodollar rate, plus a spread that ranges from 0.875% to 1.600% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that ranges from 0.000% to 0.600% depending upon our leverage ratio and credit rating. In addition, the unsecured revolving credit facility permits us to borrow at competitive bid rates determined in accordance with procedures described in the unsecured revolving credit facility agreement. We paid certain customary fees and expense reimbursements to enter into the unsecured revolving credit facility. The initial maturity of the unsecured revolving credit facility is January 2019. We have the option to extend the initial term for up to two additional 6-month periods, subject to certain conditions, including the payment of an extension fee equal to 0.075% of the then outstanding commitments under the unsecured revolving credit facility. The unsecured revolving credit facility includes the following financial covenants: (i) maximum leverage ratio of total indebtedness to total asset value of the loan parties and their consolidated subsidiaries will not exceed 60%, (ii) consolidated secured indebtedness will not exceed 40% of total asset value, (iii) tangible net worth will not be less than $745.4 million plus 75% of net equity proceeds received by us (other than proceeds received within ninety (90) days after the redemption, retirement or repurchase of ownership or equity interests in us up to the amount paid by us in connection with such redemption, retirement or repurchase, where, the net effect is that we shall not have increased our net worth as a result of any such proceeds), (iv) adjusted EBITDA (as defined in the unsecured revolving credit facility) to consolidated fixed charges will not be less than 1.50 x, (v) the aggregate net operating income with respect to all unencumbered eligible properties to the portion of interest expense attributable to unsecured indebtedness will not be less than 1.75 x, (vi) the ratio of total unsecured indebtedness to unencumbered asset value will not exceed 60%, and (vii) consolidated secured recourse indebtedness will not exceed 10% of total asset value (provided, however, this covenant shall not apply at any time after we achieve debt ratings from at least two of Moody’s, S&P and Fitch, and such debt ratings are Baa3 or better (in the case of a rating by Moody’s) or BBB- or better (in the case of a rating by S&P or Fitch)). The unsecured revolving credit facility contains customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates, and requires certain customary financial reports. The unsecured revolving credit facility contains customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross-defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control (as defined in the agreement for the unsecured credit facility). As of September 30, 2016, we were in compliance with the covenants under the unsecured revolving credit facility. Senior Unsecured Notes Exchangeable Senior Notes During August 2014, we issued $250.0 million principal amount of 2.625% Exchangeable Senior Notes (“2.625% Exchangeable Senior Notes”) due August 15, 2019. These 2.625% Exchangeable Senior Notes will be exchangeable into cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at our election. We have asserted that our intent and ability to settle the principal amount of the 2.625% Exchangeable Senior Notes is in cash. As of September 30, 2016, the exchange rate of the 2.625% Exchangeable Senior Notes was 51.5095 shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $19.41 per share of Class A common stock), subject to adjustment, as described in the related indenture governing the 2.625% Exchangeable Senior Notes. For the three and nine months ended September 30, 2016, total interest expense related to the 2.625% Exchangeable Senior Notes was $2.4 million and $7.3 million, respectively, consisting of (i) the contractual interest expense of $1.6 million and $4.9 million, respectively, (ii) the additional non-cash interest expense of $0.7 million and $2.0 million, respectively, relating to the accretion of the debt discount, and (iii) the amortization of deferred financing costs of $0.1 million and $0.4 million, respectively. For the three and nine months ended September 30, 2015, total interest expense related to the 2.625% Exchangeable Senior Notes was $2.4 million and $7.3 million, respectively, consisting of (i) the contractual interest expense of $1.6 million and $4.9 million, respectively, (ii) the additional non-cash interest expense of $0.7 million and $2.0 million, respectively, relating to the accretion of the debt discount, and (iii) the amortization of deferred financing costs of $0.1 million and $0.4 million, respectively. Series A, Series B, and Series C Senior Notes During March 2015, we issued and sold an aggregate principal amount of $350 million senior unsecured notes consisting of $100 million of 3.93% Series A Senior Notes due 2025, $125 million of 4.09% Series B Senior Notes due 2027, and $125 million of 4.18% Series C Senior Notes due 2030 (together, the “Series A, B and C Senior Notes”). Interest on the Series A, B and C Senior Notes is payable quarterly. The terms of the Series A, B and C Senior Notes agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. T he Series A, B and C Senior Notes also require compliance with financial ratios consistent with our unsecured revolving credit facility including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness. The proceeds from the issuance of the Series A, B and C Senior Notes were used to repay outstanding mortgage debt, reduce amounts outstanding under the unsecured revolving credit facility and for other general corporate purposes. As of September 30, 2016, we were in compliance with the covenants under the Series A, B and C Senior Notes. Senior Unsecured Term Loan Facility During August 2015, we entered into a $265.0 million senior unsecured term loan facility, which is referred to herein as the “term loan facility” with Wells Fargo Bank, National Association, as administrative agent, Capital One, National Association, as syndication agent, PNC Bank, National Association, as documentation agent, and the lenders from time to time party thereto. Amounts outstanding under the term loan facility bear interest at a floating rate equal to, at our election, (x) a LIBOR rate, plus a spread that ranges from 1.400% to 2.350% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that ranges from 0.400% to 1.350% depending upon our leverage ratio and credit rating. Pursuant to a forward interest rate swap agreement, we effectively fixed LIBOR at 2.1485% for $265.0 million of the term loan facility for the period beginning on August 31, 2017 through maturity. In connection with the closing of the term loan facility, we paid certain customary fees and expense reimbursements. The term loan facility matures on August 24, 2022. We may prepay loans under the term loan facility at any time, subject to certain notice requirements. To the extent that we prepay all or any portion of a loan on or prior to August 24, 2017, we will pay a prepayment premium equal to (i) if such prepayment occurs on or prior to August 24, 2016, 2.00% of the principal amount so prepaid, and (ii) if such prepayment occurs after August 24, 2016 but on or prior to August 24, 2017, 1.00% of the principal amount so prepaid. The terms of the term loan facility agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. The term loan facility requires compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness. It also contains customary events of default (subject in certain cases to specified cure periods). These terms in the term loan facility agreement are consistent with the terms in our unsecured revolving credit facility agreement. The proceeds from the term loan facility were used to repay borrowings made under the unsecured revolving credit facility. As of September 30, 2016, we were in compliance with the covenants under the term loan facility.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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