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DEBT

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

DEBT

DEBT

As of December 31, 2020, 47 of our apartment communities were not encumbered by mortgages, with 34 of those apartment communities providing credit support for our unsecured borrowings. Our primary unsecured credit facility (“unsecured credit facility”) is a revolving, multi-bank line of credit, with the Bank of Montreal serving as administrative agent. Our line of credit has total commitments and borrowing capacity of $250.0 million, based on the value of properties contained in the unencumbered asset pool (“UAP”). As of December 31, 2020, we had additional borrowing availability of $97.1 million beyond the $152.9 million drawn, including the balance on our operating line of credit (discussed below), priced at an interest rate of 2.85%, including the impact of our interest rate swap. This credit facility matures on August 31, 2022, with one 12-month option to extend the maturity date at our election. At December 31, 2019, the line of credit borrowing capacity was $250.0 million based on the UAP, of which $50.1 million was drawn on the line.

Under our unsecured credit facility, we also have unsecured term loans of $70.0 million and $75.0 million, included within notes payable on the consolidated balance sheets, which mature on January 15, 2024 and August 31, 2025, respectively.

The interest rates on the line of credit and term loans are based, at our option, on the lender's base rate plus a margin, ranging from 35-85 basis points, or the London Interbank Offered Rate (“LIBOR”), plus a margin that ranges from 135-190 basis points based on our consolidated leverage. Our unsecured credit facility and unsecured senior notes are subject to customary financial covenants and limitations. We believe that we are in compliance with all such financial covenants and limitations as of December 31, 2020.

We have a private shelf agreement for the issuance of up to $150.0 million of unsecured senior promissory notes (“unsecured senior notes”). Under this agreement, we issued $75.0 million of Series A notes due September 13, 2029, bearing interest at a rate of 3.84% annually, and $50.0 million of Series B notes due September 30, 2028, bearing interest at a rate of 3.69% annually. We have $25.0 million remaining available under the private shelf agreement.

As of December 31, 2020, we owned 20 apartment communities that served as collateral for mortgage loans. All of these mortgage loans were non-recourse to us other than for standard carve-out obligations. Interest rates on mortgage loans range from 3.47% to 5.73%, and the mortgage loans have varying maturity dates from June 1, 2021, through September 1, 2031. As of December 31, 2020, we believe there are no material defaults or instances of material noncompliance in regards to any of these mortgage loans.

We also have a $6.0 million operating line of credit. This operating line of credit is designed to enhance treasury management activities and more effectively manage cash balances. This operating line has a one-year term, with pricing based on a market spread plus the one-month LIBOR index rate.

The following table summarizes our indebtedness:

						(in thousands)
						December 31, 2020			December 31, 2019						Weighted Average Maturity in Years
Lines of credit						$	152,871		$	50,079					1.62
Term loans(1)						145,000			145,000						3.88
Unsecured senior notes(1)						125,000			125,000						8.33
Unsecured debt						422,871			320,079						4.38
Mortgages payable - fixed						298,445			331,376						5.23
Total debt						$	721,316		$	651,455					4.73
Annual Weighted Average Interest Rates
Lines of credit (rate with swap)						2.85		%	3.81		%
Term loans (rate with swaps)						4.15		%	4.11		%
Unsecured senior notes						3.78		%	3.78		%
Mortgages payable						3.93		%	4.02		%
Total debt						3.62		%	3.97		%

(1)Included within notes payable on our consolidated balance sheets.

The aggregate amount of required future principal payments on mortgages payable and notes payable as of December 31, 2020 is as follows:

						(in thousands)
2021						$	25,665
2022						37,219
2023						45,068
2024						3,777
2025						102,505
Thereafter						354,211
Total payments						$	568,445

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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