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Indebtedness | 9 Months Ended
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Sep. 30, 2015
Indebtedness |
Indebtedness | Note 5. Indebtedness Our principal debt obligations at September 30, 2015 were: (1) outstanding borrowings under our $1,000,000 revolving credit facility; (2) six public issuances of senior unsecured notes, including: (a) $250,000 principal amount at an annual interest rate of 4.30% due in 2016 (which we prepaid in November 2015), (b) $400,000 principal amount at an annual interest rate of 3.25% due in 2019, (c) $200,000 principal amount at an annual interest rate of 6.75% due in 2020, (d) $300,000 principal amount at an annual interest rate of 6.75% due in 2021, (e) $250,000 principal amount at an annual interest rate of 4.75% due in 2024 and (f) $350,000 principal amount at an annual interest rate of 5.625% due in 2042; (3) our $350,000 principal amount term loan; (4) our $200,000 principal amount term loan; and (5) $723,170 aggregate principal amount of mortgages secured by 57 of our properties (58 buildings) with maturity dates between 2016 and 2043. The 57 mortgaged properties (58 buildings) had a carrying value before depreciation of $1,148,595 at September 30, 2015. We also had two properties subject to capital leases with lease obligations totaling $1 2,313 at September 30, 2015; these two properties had a carrying value before depreciation of $35,515 at September 30, 2015. The capital leases expire in 2026. In September 2015, we partially exercised the accordion feature under our unsecured revolving credit facility agreement and increased the maximum borrowings available under the facility to $1,000,000 from the previous amount of $750,000. All other material terms under the credit facility remain unchanged. The maturity date of our revolving credit facility is January 15, 2018 and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date by an additional one year to January 15, 2019. The revolving credit facility agreement provides that we can borrow, repay and reborrow funds available under the revolving credit facility agreement until maturity, and no principal repayment is due until maturity. The revolving credit facility agreement includes a feature under which maximum borrowings under the facility may be increased to up to $1,500,000 in certain circumstances. The interest rate paid on borrowings under the revolving credit facility agreement is LIBOR plus a premium of 130 basis points, and the facility fee is 30 basis points per annum on the total amount of lending commitments. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2015, the annual interest rate payable on borrowings under our revolving credit facility was 1.46%, and the weighted average annual interest rates for borrowings under our revolving credit facility were 1.47% and 1.48% for the three and nine months ended September 30, 2015, respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 1.42% for both the three and nine months ended September 30, 2014. As of September 30, 2015, we had $467,757 outstanding and $532,243 available for borrowing, and as of November 3, 2015, we had $745,000 outstanding and $255,000 available for borrowing under our revolving credit facility. On September 28, 2015, we entered into a term loan agreement with Wells Fargo Bank, National Association and a syndicate of other lenders, pursuant to which we obtained a $200,000 unsecured term loan. This term loan matures on September 28, 2022, and is prepayable without penalty beginning September 29, 2017. In addition, this term loan includes a feature under which maximum borrowings may be increased to up to $400,000 in certain circumstances. This term loan requires interest at a rate of LIBOR plus a premium of 180 basis points that is subject to adjustment based upon changes to our credit ratings. We used the net proceeds from this term loan to repay a part of amounts outstanding under our revolving credit facility. As of September 30, 2015, the annual interest rate payable for amounts outstanding under this term loan was 1.99%. In addition to our $200,000 term loan, we also have a $350,000 unsecured term loan, which we borrowed in 2014. This term loan matures on January 15, 2020, and is prepayable without penalty at any time. This term loan includes a feature under which maximum borrowings may be increased to up to $700,000 in certain circumstances. This term loan requires interest at a rate of LIBOR plus a premium of 140 basis points that is subject to adjustment based upon changes to our credit ratings. As of September 30, 2015, the annual interest rate payable on amounts outstanding under this term loan was 1.60%. The weighted average annual interest rate for amounts outstanding under this term loan was 1.61% and 1.60% for the three and nine months ended September 30, 2015, respectively. The weighted average annual interest rate for amounts outstanding under this term loan was 1.55% for the three months ended September 30, 2014 and for the period from May 30, 2014 (the day we entered into the term loan agreement) to September 30, 2014. Our revolving credit facility and term loan agreements provide for the acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, including a change of control of us, which includes The RMR Group LLC (formerly known as Reit Management & Research LLC), or RMR LLC, ceasing to act as our business manager and property manager. Our senior notes indenture and its related supplements and our credit facility and term loan agreements contain a number of financial and other covenants, including covenants that restrict our ability to incur debt or to make distributions under certain circumstances, and generally require us to maintain financial ratios. We believe we were in compliance with the terms and conditions of our senior notes indenture and its supplements and our credit facility and term loan agreements at September 30, 2015. In December 2014, we entered an agreement to acquire the 38 senior living communities discussed in Note 3 above. Simultaneous with entering this agreement, we obtained a bridge loan commitment for $700,000. In February 2015, we terminated the bridge loan commitment and we recognized a loss of $1,409 on early extinguishment of debt in the first quarter of 2015 in connection with that termination. As discussed in Note 3 above, we acquired these senior living communities in May and September 2015 and financed the acquisition using cash on hand, borrowings under our revolving credit facility and the assumption of approximately $151,477 of mortgage debts with a weighted average annual interest rate of 4.57%. These mortgages have maturity dates from October 2018 through July 2019. We determined the fair value of the assumed mortgage debts using a market approach based upon Level 3 inputs (significant other unobservable inputs) in the fair value hierarchy. In connection with two of the 23 MOBs we acquired in January 2015, as further discussed in Note 3 above, we assumed $29,955 of mortgage debts which we recorded at is aggregate fair value of $31,029. These two assumed mortgage debts have a contractual weighted average annual interest rate of 4.73% and mature in July 2016 and October 2022. We determined the fair value of the assumed mortgages using a market approach based upon Level 3 inputs (significant other unobservable inputs) in the fair value hierarchy. In February 2015, we repaid at maturity a mortgage that encumbered one of our properties that had a principal balance of $29,227 and an annual interest rate of 6.02%. In April 2015, we prepaid a mortgage that encumbered one of our properties that had a principal balance of $6,274 and an annual interest rate of 5.81%. In May 2015, we prepaid four mortgages encumbering four properties with an aggregate principal balance of $15,077 and a weighted average annual interest rate of 5.70%. In June 2015, we repaid at maturity a mortgage encumbering one property with a principal balance of $4,867 and an annual interest rate of 5.65%. Also in June 2015, we prepaid a mortgage encumbering one property with a principal balance of $4,351 and an annual interest rate of 5.81%. In October 2015, we prepaid two mortgages encumbering one property with a principal balance of $52,000 and a weighted average annual interest rate of 5.64%. In November 2015, we prepaid all $250,000 of our 4.30% senior unsecured notes due January 2016. We funded all of the foregoing payments with cash on hand and borrowings under our revolving credit 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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