Quarterly report pursuant to Section 13 or 15(d)

DEBT FINANCING

v3.7.0.1
DEBT FINANCING
6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
DEBT FINANCING
DEBT FINANCING
The Company's outstanding debt as of June 30, 2017 and December 31, 2016 is summarized as follows (dollars in thousands):
 
 
 
 
 
 
 
Interest Rate(1)
 
June 30, 2017
 
December 31, 2016
Credit Facility:
 
 
 
 
 
Revolving line of credit
2.62%
 
$
181,000

 
$
246,500

Term loan A
2.60%
 
235,000

 
225,000

Term loan B
3.24%
 
155,000

 
100,000

Term loan C
3.71%
 
105,000

 

Term loan facility
3.08%
 
100,000

 
100,000

Fixed rate mortgages payable
4.15%
 
188,932

 
201,694

Total principal
 
 
964,932

 
873,194

Unamortized debt issuance costs and debt premium, net
 
 
4,208

 
5,760

Total debt
 
 
$
969,140

 
$
878,954


(1) 
Represents the effective interest rate as of June 30, 2017. Effective interest rate incorporates the stated rate plus the impact of interest rate cash flow hedges and discount and premium amortization, if applicable. For the revolving line of credit, the effective interest rate excludes fees for unused borrowings. 
Credit Facility Increase
 On February 8, 2017, pursuant to a partial exercise by the Company's operating partnership of its expansion option under its amended and restated credit agreement dated as of May 6, 2016, the Company's operating partnership, as borrower, certain of its subsidiaries that are party to the amended and restated credit agreement, as subsidiary guarantors, and the Company, as parent guarantor, entered into a second increase agreement and amendment (the "Increase Agreement") with a syndicated group of lenders to increase the total borrowing capacity under the tranche A term loan facility (the "Term Loan A") and the tranche B term loan facility (the "Term Loan B") by $10.0 million and $55.0 million, respectively, and to provide a new tranche C term loan facility ("Term Loan C") in an aggregate outstanding principal amount of $105.0 million, which, in the aggregate, increased the total borrowing capacity by $170.0 million for a total unsecured credit facility of $895.0 million consisting of the following components: (i) a $400.0 million revolving line of credit (the "Revolver" and together with the Term Loan A, Term Loan B and Term Loan C, the "credit facility"), (ii) Term Loan A, which now provides for a total borrowing commitment of up to $235.0 million, (iii) Term Loan B, which now provides for a total borrowing commitment of up to $155.0 million and (iv) Term Loan C, which provides for a total borrowing commitment of up to $105.0 million. The Company continues to have an expansion option under the credit facility, which, if exercised in full, would provide for a total credit facility of $1.0 billion.
The Term Loan C matures on February 8, 2024. It is not subject to any scheduled reduction or amortization payment prior to maturity. Interest rates applicable to loans under Term Loan C are determined based on a 1, 2, 3 or 6 month London Interbank Offered Rate ("LIBOR") period (as elected by the Company at the beginning of any applicable interest period) plus an applicable margin or a base rate, determined by the greatest of the Key Bank prime rate, the federal funds rate plus 0.50% or one month LIBOR plus 1.00%, plus an applicable margin. The applicable margins for Term Loan C are leverage based and range from 1.70% to 2.25% for LIBOR loans and 0.70% to 1.25% for base rate loans; provided that after such time as the Company achieves an investment grade rating from at least two rating agencies, the Company may elect (but is not required to elect) that Term Loan C is subject to the rating based on applicable margins ranging from 1.50% to 2.45% for LIBOR Loans and 0.50% to 1.45% for base rate loans. Prepayments of any loans under Term Loan C are subject to prepayment premiums of 2.00% from the date of the Increase Agreement through and including the first anniversary of the Increase Agreement and 1.00% from the first anniversary of the Increase Agreement through and including the second anniversary of the Increase Agreement. There is no prepayment penalty thereafter. Other than the increases and amendments related to Term Loan C described above, the Increase Agreement did not impact or amend the amended and restated credit agreement's previously disclosed terms, including its covenants, events of default, or terms of payment.
As of June 30, 2017, the Company had outstanding letters of credit totaling $4.7 million and would have had the capacity to borrow remaining Revolver commitments of $214.3 million while remaining in compliance with the credit facility's financial covenants. At June 30, 2017, the Company was in compliance with all such covenants.
For a summary of the Company's financial covenants and additional detail regarding the Company's credit facility, term loan facility, and fixed rate mortgage payables, please see Note 8 to the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Future Debt Obligations
Based on existing debt agreements in effect as of June 30, 2017, the scheduled principal and maturity payments for the Company's outstanding borrowings are presented in the table below (in thousands):
Year Ending December 31,
 
Scheduled Principal and Maturity Payments
 
Amortization of Premium and Unamortized Debt Issuance Costs
 
Total
Remainder of 2017
 
$
2,342

 
$
198

 
$
2,540

2018
 
10,617

 
293

 
10,910

2019
 
4,983

 
225

 
5,208

2020
 
220,245

 
(127
)
 
220,118

2021
 
242,509

 
(215
)
 
242,294

2022
 
159,205

 
68

 
159,273

Thereafter
 
325,031

 
3,766

 
328,797

 
 
$
964,932

 
$
4,208

 
$
969,140