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DEBT OBLIGATIONS | 12 Months Ended
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Dec. 31, 2022
Debt Disclosure [Abstract] |
DEBT OBLIGATIONS | 9. DEBT OBLIGATIONS The following table sets forth information regarding the Company’s consolidated debt obligations outstanding as of December 31, 2022 and 2021 (in thousands):
| December 31, 2022 |  | December 31, 2021 |  | Effective Interest Rate |  | Maturity Date |
UNSECURED DEBT |  |  |  |  |  |  |  |
$600 million Unsecured Credit Facility | $ | 88,500 |  |  | $ | 23,000 |  |  | SOFR + 1.15% |  | June 2026 |
Unsecured Term Loan | 250,000 |  |  | 250,000 |  |  | SOFR + 1.30% |  | June 2027 | (a)
$350.0M 3.95% Guaranteed Notes due 2023 | 54,301 |  |  | 350,000 |  |  | 3.87% |  | February 2023 | (b)
$350.0M 4.10% Guaranteed Notes due 2024 | 350,000 |  |  | 350,000 |  |  | 3.78% |  | October 2024 |
$450.0M 3.95% Guaranteed Notes due 2027 | 450,000 |  |  | 450,000 |  |  | 4.03% |  | November 2027 |
$350.0M 7.55% Guaranteed Notes due 2028 | 350,000 |  |  | — |  |  | 7.73% |  | March 2028 |
$350.0M 4.55% Guaranteed Notes due 2029 | 350,000 |  |  | 350,000 |  |  | 4.30% |  | October 2029 |
Indenture IA (Preferred Trust I) | 27,062 |  |  | 27,062 |  |  | LIBOR + 1.25% |  | March 2035 |
Indenture IB (Preferred Trust I) | 25,774 |  |  | 25,774 |  |  | LIBOR + 1.25% |  | April 2035 |
Indenture II (Preferred Trust II) | 25,774 |  |  | 25,774 |  |  | LIBOR + 1.25% |  | July 2035 |
Principal balance outstanding | 1,971,411 |  |  | 1,851,610 |  |  |  |  |  |
Plus: original issue premium (discount), net | 2,934 |  |  | 8,187 |  |  |  |  |  |
Less: deferred financing costs | (9,307) |  |  | (6,211) |  |  |  |  |  |
Total unsecured indebtedness | $ | 1,965,038 |  |  | $ | 1,853,586 |  |  |  |  |  |
(a)On November 23, 2022, the unsecured term loan of $250.0 million was swapped to a fixed rate of 5.01% and matures on June 30, 2027. The effective date of the swap is January 31, 2023. (b)Remaining balance was redeemed on January 20, 2023. The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness. The Parent Company has no material assets other than its investment in the Operating Partnership. Unsecured Credit Facility and Unsecured Term Loan On June 30, 2022, the Company entered into the Second Amended and Restated Credit Agreement (as amended and restated, the “2022 Credit Agreement”). The 2022 Credit Agreement among other things: (i) maintains the total commitment under the line credit of $600.0 million (the “Revolving Credit Facility”) and provides an unsecured term loan in the initial amount of $250.0 million (the “Term Loan”) with a scheduled maturity date of June 30, 2027; (ii) extended the maturity date of the Revolving Credit Facility from July 15, 2022 to June 30, 2026, with two six-month extensions at the Company’s election subject to specified conditions and subject to payment of an extension fee; (iii) reduced the interest rate margins applicable to SOFR revolving loans; and (iv) provides for an additional interest rate option based on a floating SOFR rate. In connection with the amendments, the Company capitalized $4.7 million and $2.0 million in financing costs, related to the Revolving Credit Facility and the Term Loan, respectively. The financing costs will be amortized through the maturity dates for each of the Revolving Credit Facility and the Term Loan. Upon closing of the 2022 Credit Agreement, the Term Loan was funded in full and the proceeds thereof, together with cash on hand, were used to prepay in full the Company’s unsecured term loan (“Term Loan C”) in the principal amount of $250.0 million, together with accrued and unpaid interest thereon. Term Loan C was scheduled to mature on October 8, 2022. Under the 2022 Credit Agreement, the Company may, subject to specified terms and conditions (including receipt of commitments from one or more lenders, whether or not currently parties to the 2022 Credit Agreement), elect to increase the amount of the Revolving Credit Facility and/or Term Loan or request one or more new pari passu tranches of unsecured term loans (each, an “Incremental Facility”), provided that the aggregate amount of all such increases is limited to $500.0 million. Up to $50.0 million of borrowing availability under the 2022 Credit Agreement is available for the issuance of letter of credits. Borrowings under the Revolving Credit Facility bear interest at a rate equal to either (i) the SOFR rate plus a margin of 72.5 to 140 basis points, or (ii) a base rate plus a margin of 0 to 40 basis points: and the Term Loan and borrowings under an Incremental Facility bear interest at a rate equal to either (i) the SOFR rate plus a margin of 80 to 160 basis points, or (ii) a base rate plus a margin of 0 to 60 basis points. The applicable margin will be determined based upon the unsecured senior debt rating of the Operating Partnership or the absence of such a rating. The Company also pays a quarterly facility fee on the total commitments under the Revolving Credit Facility. As of September 30, 2022, based on the Operating Partnership's unsecured senior debt rating, the applicable margin for SOFR revolving loans under the Revolving Credit Facility was 105 basis points (excluding the applicable facility fee rate of 25 basis points) and was 120.0 basis points for the Term Loan, plus, in each case, a daily SOFR adjustment of 10 basis points. The terms of the 2022 Credit Agreement require that the Company maintain customary financial and other covenants, including: (i) a fixed charge coverage ratio greater than or equal to 1.5 to 1.00; (ii) a leverage ratio less than or equal to 0.60 to 1.00, subject to specified exceptions; (iii) a ratio of unsecured indebtedness to unencumbered asset value less than or equal to 0.60 to 1.00, subject to specified exceptions; (iv) a ratio of secured indebtedness to total asset value less than or equal to 0.40 to 1.00; and (v) a ratio of unencumbered cash flow to interest expense on unsecured debt greater than 1.75 to 1.00. In addition, the 2022 Credit Agreement restricts payments of dividends and distributions on shares in excess of 95% of the Company's funds from operations (FFO) except to the extent necessary to enable the Company to continue to qualify as a REIT for federal income tax purposes. The Company had $88.5 million of borrowings under the Revolving Credit Facility as of December 31, 2022. During the twelve months ended December 31, 2022, the weighted-average interest rate on Revolving Credit Facility borrowings was 3.04% resulting in $5.6 million of interest expense. During the twelve months ended December 31, 2021 weighted-average interest rate on Revolving Credit Facility borrowings was 1.21% resulting in $0.4 million of interest expense. Guaranteed Notes due 2028 On December 13, 2022, the Company completed an underwritten offering of $350.0 million aggregate principal amount of its 7.55% Guaranteed Notes due 2028 (the “2028 Notes”). The 2028 Notes were priced at 99.06% of their face amount and have been reflected net of a discount of approximately $3.3 million in the consolidated balance sheet as of December 31, 2022. The Company received approximately $344.6 million of proceeds after the deduction for underwriting discounts and offering expenses. Guaranteed Notes due 2023 On December 20, 2022, the Company used a portion of the net proceeds from the offering of the 2028 Notes to repurchase $295.7 million aggregate principal amount of its outstanding 3.95% guaranteed notes due 2023 (the “2023 Notes”), through a tender offer, together with $4.1 million of accrued and unpaid interest thereon. The Company recognized a $0.4 million loss on early extinguishment of debt related to the total repurchase. On January 20, 2023, the Company completed the redemption of the remaining $54.3 million aggregate principal amount of the 2023 Notes. See Note 21, “Subsequent Events” for further information regarding the redemption. The Company was in compliance with all financial covenants as of December 31, 2022. Certain of the covenants restrict the Company’s ability to obtain alternative sources of capital. As of December 31, 2022, the aggregate scheduled principal payments on the Company's debt obligations were as follows (in thousands):
2023 | $ | 54,301 |
2024 | 350,000 |
2025 | — |
2026 | 88,500 |
2027 | 700,000 |
Thereafter | 778,610 |
Total principal payments | 1,971,411 |
Net unamortized premiums/(discounts) | 2,934 |
Net deferred financing costs | (9,307) |
Outstanding indebtedness | $ | 1,965,038 |

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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 https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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