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Debt Obligations
 12 Months Ended
Dec. 31, 2011
Debt Obligations  
Debt Obligations

 

9. Debt Obligations

        Bank Borrowings.    During 2011, we entered into a new $210,000,000 Unsecured Credit Agreement which provides for the opportunity to increase the credit amount up to a total of $250,000,000. The new Unsecured Credit Agreement provides a revolving line of credit with no scheduled maturities other than the maturity date of April 18, 2015, and allows us to borrow at the same interest rates applicable to borrowings under our prior agreement, 150 basis points over LIBOR based on current leverage ratios. Financial covenants contained in the new Unsecured Credit Agreement, which are measured quarterly, require us to maintain, among other things:

  • (i)
    a ratio of total indebtedness to total asset value not greater than 0.5 to 1.0;

    (ii)
    a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

    (iii)
    a ratio of unsecured debt to the value of the unencumbered asset pool not greater than 0.6 to 1.0; and

    (iv)
    a ratio of EBITDA, as calculated in the new Unsecured Credit Agreement, to fixed charges not less than 1.50 to 1.0.

        During 2011 we borrowed $167,600,000 and repaid $149,300,000 under our Unsecured Credit Agreement. At December 31, 2011, we had $56,000,000 outstanding at an interest rate of LIBOR plus 1.50% and $154,000,000 available for borrowing. During January 2012, we borrowed $4,000,000. After this borrowing, we had $60,000,000 outstanding and $150,000,000 available for borrowing. At December 31, 2011 and 2010, we were in compliance with all covenants.

        Senior Unsecured Notes.    During 2011, we sold to affiliates and managed accounts of Prudential Investment Management, Inc. (individually and collectively "Prudential") $50,000,000 aggregate principal amount of 4.80% senior unsecured term notes fully amortizing to maturity on July 20, 2021. Additionally, we entered into an Amended and Restated Note Purchase and Private Shelf agreement with Prudential which provides for the possible issuance of up to an additional $100,000,000 of senior unsecured fixed-rate term notes during a three-year issuance period. Financial covenants contained in the Amended and Restated Note Purchase and Private Shelf agreement are substantially the same as the financial covenants contained in our Unsecured Credit Agreement. During 2010, we sold to Prudential $25,000,000 aggregate principal amount of 5.26% senior unsecured term notes due July 14, 2015 and $25,000,000 aggregate principal amount of 5.74% senior unsecured term notes fully amortizing to maturity on January 14, 2019.

        Mortgage Loans Payable.    At December 31, 2011 and 2010, we had no mortgage loans payable outstanding. During 2010, we paid off a $7,626,000 mortgage loan secured by an assisted living property located in California. The retired debt had an interest rate of 8.69%. Also, during 2010, we paid $59,000 in regularly scheduled principal payments.

        Bonds Payable.    At December 31, 2011 and 2010 we had outstanding principal of $3,200,000 and $3,730,000, respectively, on multifamily tax-exempt revenue bonds that are secured by five assisted living properties in Washington. These bonds bear interest at a variable rate that is reset weekly and mature during 2015. For the year ended December 31, 2011, the weighted average interest rate, including letter of credit fees, on the outstanding bonds was 2.10%. During 2011 and 2010 we paid $530,000 and $495,000, respectively, in regularly scheduled principal payments. At December 31, 2011 and 2010, the aggregate carrying value of real estate properties securing our bonds payable was $6,915,000 and $7,179,000, respectively.

        Scheduled Principal Payments.    The following table represents our long term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2011, and excludes the effects of interest (in thousands):

 
   Total   2012   2013   2014   2015   2016   Thereafter  

Bank borrowings

   $ 56,000 (1) $ —   $ —   $ —   $ 56,000   $ —   $ —  

Senior unsecured notes

     100,000     —     —     4,167     29,166     16,667     50,000  

Bonds payable

     3,200     565     600     635     1,400     —     —  
                               

 

   $ 159,200   $ 565   $ 600   $ 4,802   $ 86,566   $ 16,667   $ 50,000  
                               
(1)
At December 31, 2011 we had $154,000 available for borrowing under our Unsecured Credit Agreement. During January 2012, we borrowed $4,000 under our Unsecured Credit Agreement. After this borrowing, we had $60,000 outstanding and $150,000 available for borrowing.