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Indebtedness | 12 Months Ended
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Dec. 31, 2022
Debt Disclosure [Abstract] |
Indebtedness | Indebtedness At December 31, 2022 and 2021, our outstanding indebtedness consisted of the following:
|  |  |  | Principal Balance as of December 31,
Floating Rate Debt |  | Maturity |  | 2022 |  | 2021
Credit facility (1)(2)(3) |  | January 2024 |  | $ | 700,000 |  |  | $ | 800,000 |
Total floating rate debt |  |  |  | $ | 700,000 |  |  | $ | 800,000 |
(1)In February 2022, we exercised our option to extend the maturity date of our credit facility by one year to January 2024. (2)In January 2023, pursuant to the terms of our credit agreement, we repaid $113,627 in outstanding borrowings under our credit facility and the facility commitments were reduced to $586,373. (3)In February 2023, we and our lenders amended our credit agreement to, among other things, extend the waiver of the fixed charge coverage ratio covenant through January 15, 2024 and reduce our credit facility commitments to $450,000 following our repayment of $136,373 in outstanding borrowings.
|  |  |  |  |  | December 31, 2022 |  | December 31, 2021
Senior Unsecured Notes (1) |  | Coupon |  | Maturity |  | Face Amount |  | Unamortized Discount |  | Face Amount |  | Unamortized Discount
Senior unsecured notes |  | 4.750 | % |  | May 2024 |  | $ | 250,000 |  |  | 105 |  |  | $ | 250,000 |  |  | $ | 184 |
Senior unsecured notes (2) |  | 9.750 | % |  | June 2025 |  | 500,000 |  |  | — |  |  | 1,000,000 |  |  | — |
Senior unsecured notes |  | 4.750 | % |  | February 2028 |  | 500,000 |  |  | 4,325 |  |  | 500,000 |  |  | 5,169 |
Senior unsecured notes (2) |  | 4.375 | % |  | March 2031 |  | 500,000 |  |  | — |  |  | 500,000 |  |  | — |
Senior unsecured notes |  | 5.625 | % |  | August 2042 |  | 350,000 |  |  | — |  |  | 350,000 |  |  | — |
Senior unsecured notes |  | 6.250 | % |  | February 2046 |  | 250,000 |  |  | — |  |  | 250,000 |  |  | — |
Total senior unsecured notes |  |  |  |  |  | $ | 2,350,000 |  |  | $ | 4,430 |  |  | $ | 2,850,000 |  |  | $ | 5,353 |
(1)As of December 31, 2022 and 2021, the unamortized net debt issuance costs on certain of these notes were $27,870 and $37,836, respectively. (2)These notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including pledged subsidiaries under our credit agreement. The notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and are structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes.
|  | Principal Balance as of December 31, |  |  |  |  |  | Number of Properties as Collateral |  | Net Book Value of Collateral as of December 31,
Secured and Other Debt |  | 2022 (1) |  | 2021 (1) |  | Interest Rate |  | Maturity |  | At December 31, 2022 |  | 2022 |  | 2021
Mortgage note |  | $ | — |  |  | $ | 11,120 |  |  | 6.28 | % |  | July 2022 |  | — |  |  | $ | — |  |  | $ | 23,525 |
Mortgage note |  | — |  |  | 10,479 |  |  | 4.85 | % |  | October 2022 |  | — |  |  | — |  |  | 19,211 |
Mortgage note |  | — |  |  | 15,456 |  |  | 5.75 | % |  | October 2022 |  | — |  |  | — |  |  | 19,099 |
Mortgage note |  | 14,732 |  |  | 15,204 |  |  | 6.64 | % |  | June 2023 |  | 1 |  |  | 24,645 |  |  | 24,593 |
Mortgage note |  | 9,997 |  |  | 10,240 |  |  | 4.44 | % |  | July 2043 |  | 1 |  |  | 13,234 |  |  | 13,387 |
Finance Leases |  | 5,339 |  |  | 6,636 |  |  | 7.70 | % |  | April 2026 |  | 2 |  |  | 20,624 |  |  | 18,527 |
Total secured |  | $ | 30,068 |  |  | $ | 69,135 |  |  |  |  |  |  | 4 |  |  | $ | 58,503 |  |  | $ | 118,342 |
(1)The principal balances are the amounts stated in the contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts. As of December 31, 2022 and 2021, the unamortized net premiums and debt issuance costs on certain of these mortgages were $(109) and $(578), respectively. As of December 31, 2022, we had a $700,000 credit facility that was available for general business purposes. As of December 31, 2022, our credit facility required interest to be paid on borrowings at the annual rate of 6.9%, plus a facility fee of 30 basis points per annum on the total amount of lending commitments under the facility. The weighted average annual interest rates for borrowings under our credit facility were 4.5%, 2.9% and 2.2% for the years ended December 31, 2022, 2021 and 2020, respectively. On March 31, 2021, we borrowed $800,000 under our credit facility as a precautionary measure to increase our cash position and preserve financial flexibility in light of uncertainties related to the COVID-19 pandemic. As of December 31, 2022 and February 24, 2023, we were fully drawn under our credit facility. In January 2021, we and our lenders amended the agreements governing our credit facility and our $200,000 term loan, or collectively, our credit and term loan agreements, in order to provide us with certain flexibility in light of uncertainties related to the COVID-19 pandemic. Pursuant to the amendments: •certain of the financial covenants under our credit and term loan agreements, including covenants that require us to maintain certain financial ratios, were waived through June 2022; •the credit facility commitments were reduced from $1,000,000 to $800,000, and as a result of the reduction in commitments, we recorded a loss on early extinguishment of debt of $563 for the year ended December 31, 2021; •we pledged certain equity interests of subsidiaries owning properties to secure our obligations under our credit and term loan agreements and agreed to provide, and as of December 2022 had provided, first mortgage liens on 61 medical office and life science properties with an aggregate gross book value of real estate assets of $1,002,319 as of December 31, 2022 to secure our obligations, which pledges and/or mortgage liens may be removed or new ones may be added based on outstanding debt amounts, among other things; •we had the ability to fund $250,000 of capital expenditures per year, which increased to $350,000 per year following the repayment of our term loan in February 2021, and are restricted in our ability to acquire real property as defined in our credit agreement; •the interest rate premium over LIBOR under our credit facility and our previously existing $200,000 term loan increased by 30 basis points; •certain financial covenants and restrictions on distributions to common shareholders, share repurchases, capital expenditures, acquiring additional properties and incurring additional indebtedness (in each case subject to various exceptions), and the minimum liquidity requirement of $200,000 remained in place through June 2022; and •we are generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions, and debt financings to the repayment of any amounts outstanding under our credit facility. In September 2021, we and our lenders further amended our credit agreement. Among other things, the amendment set forth the mechanics for establishing a replacement benchmark rate under our credit agreement at such time as LIBOR would no longer be available to calculate interest payable on amounts outstanding thereunder. In February 2022, we and our lenders further amended our credit agreement. Pursuant to the amendment: •the waiver of the fixed charge coverage ratio covenant included in our credit agreement was extended through December 31, 2022; •the facility commitments were reduced from $800,000 to $700,000 following our repayment of $100,000; •we have the ability to fund $400,000 of capital expenditures per year and we are restricted in our ability to acquire real property as defined in our credit agreement; •the interest rate premium under our credit facility increased by 15 basis points; and •certain financial covenants and restrictions on distributions to common shareholders, share repurchases, capital expenditures, acquiring additional properties and incurring additional indebtedness (in each case subject to various exceptions), and the minimum liquidity requirement of $200,000 remained in place through December 31, 2022. In February 2022, we exercised our option to extend the maturity date of our credit facility by one year to January 2024. In January 2023, pursuant to the terms of our credit agreement, we repaid $113,627 in outstanding borrowings under our credit facility and the facility commitments were reduced to $586,373. In February 2023, we and our lenders further amended our credit agreement. Pursuant to the amendment: •the waiver of the fixed charge coverage ratio covenant has been extended through the maturity date of our credit facility in January 2024; •the minimum liquidity requirement was decreased from $200,000 to $100,000; •the facility commitments have been reduced from $586,373 to $450,000; •the feature of our credit facility permitting us to repay and reborrow funds was eliminated; •we continue to have the ability to fund $400,000 of capital expenditures per year and we are restricted in our ability to acquire real property as defined in the credit agreement; •SOFR was established as the replacement benchmark rate in place of LIBOR to calculate interest payable on amounts outstanding under our credit facility, and the interest rate premium under our credit facility was increased by 40 basis points; and •we are required to repay outstanding amounts under the credit facility with excess cash flow, and certain financial covenants and restrictions on distributions to common shareholders, share repurchases, capital expenditures, acquiring additional properties and incurring additional indebtedness (in each case subject to various exceptions) will remain in place through the maturity date of our credit facility. In February 2021, we issued $500,000 aggregate principal amount of our 4.375% senior notes due 2031 in an underwritten public offering raising net proceeds of $491,357, after deducting estimated offering expenses and underwriters' discounts. These notes are guaranteed by all of our subsidiaries, except for certain excluded subsidiaries, including pledged subsidiaries under our credit agreement and require semi-annual interest payments through maturity. We used the net proceeds from this offering to prepay in full in February 2021 our $200,000 term loan which was scheduled to mature in September 2022. The weighted average interest rate under our $200,000 term loan was 2.9% for the period from January 1, 2021 to February 7, 2021 and 2.7% and 3.7% for the years ended December 31, 2020 and 2019, respectively. As a result of the prepayment of our $200,000 term loan, we recorded a loss on early extinguishment of debt of $1,477 for the year ended December 31, 2021. In June 2021, we used the remaining net proceeds from this offering and cash on hand to redeem all of our outstanding 6.75% senior notes due 2021 for a redemption price equal to the principal amount of $300,000 plus accrued and unpaid interest of $10,125, when these notes became redeemable with no prepayment premium. In connection with this redemption, we recorded a loss on early extinguishment of debt of $370 for the year ended December 31, 2021. In April 2022, we prepaid a mortgage note secured by one of our medical office properties with an outstanding principal balance of approximately $10,934, a maturity date in July 2022 and an annual interest rate of 6.28%, using cash on hand. In June 2022, we redeemed $500,000 of our outstanding 9.75% senior notes due 2025 for a redemption price equal to 104.875% of the $500,000 principal amount of the notes being redeemed plus accrued and unpaid interest of $1,083, using restricted cash on hand. As a result of this redemption, we recorded a loss on early extinguishment of debt of $29,576 for the year ended December 31, 2022. In July 2022, we prepaid a mortgage note secured by two of our senior living communities with an outstanding principal balance of approximately $15,273, a maturity date in October 2022 and an annual interest rate of 5.75%, using cash on hand. In October 2022, we repaid a mortgage note secured by one of our life science properties with an outstanding principal balance of approximately $10,287, a maturity date in October 2022 and an annual interest rate of 4.85%, using cash on hand. Interest on our senior unsecured notes are payable either semi-annually or quarterly in arrears; however, no principal repayments are due until maturity. Required monthly payments on our mortgages include principal and interest. Payments under our finance leases are due monthly. We include amortization of finance lease assets in depreciation and amortization expense. Our credit agreement and our senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, as defined, which includes RMR ceasing to act as our business and property manager. Our senior unsecured notes indentures and their supplements and our credit agreement also contain covenants that restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts and require us to maintain various financial ratios, and our credit agreement contains covenants that restrict our ability to make distributions to our shareholders in certain circumstances. As of December 31, 2022, our ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under our credit agreement and our public debt covenants as the effects of the slow recovery of our SHOP business from the COVID-19 pandemic, high inflation, rising interest rates, geopolitical risks and other economic, market and industry conditions continued to adversely impact our operations. We are unable to incur additional debt until this ratio is at or above 1.5x on a pro forma basis. As of December 31, 2022, we believe we were in compliance with all of the other covenants under our senior unsecured notes indentures and their supplements, our credit agreement and our other debt obligations, subject to the waivers described above. Although we have taken steps to enhance our ability to maintain sufficient liquidity, a protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from high inflation, rising or sustained high interest rates, geopolitical risks or other economic, market or industry conditions, including downturns or recessions, may cause increased pressure on our ability to satisfy financial and other covenants. If our operating results and financial condition are significantly negatively impacted by the economic conditions or otherwise, we may fail to satisfy covenants and conditions under our credit agreement or fail to satisfy our public debt covenants. Further, if we believe we will not be able to satisfy our financial or other covenants, we expect that we would seek waivers or amendments prior to any covenant violation or seek other financing alternatives, which may lead to increased costs and interest rates, additional restrictive covenants or other lender protections. We cannot assure that we would be able to obtain these waivers or amendments or repay the related debt facilities when due, which may result in an event of default under the agreements governing our debt or the potential acceleration of our outstanding debt. Required principal payments on our outstanding debt as of December 31, 2022, were as follows:
Year |  | Principal Payment |
2023 |  | $ | 266,413 |  |
2024 |  | 701,834 |  |
2025 |  | 502,001 |  |
2026 |  | 904 |  |
2027 |  | 302 |  |
Thereafter |  | 1,608,614 |  | (1)
(1) The carrying value of our total debt outstanding as of December 31, 2022, including unamortized debt issuance costs, premiums and discounts was $3,047,877.

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