Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt

Debt

Senior Unsecured Credit Facility

On February 20, 2020, we entered into the Fourth Amended and Restated Credit Facility, which has capacity of approximately $2.1 billion, comprised of (i) a $1.8 billion unsecured revolving credit facility for our working capital needs, acquisitions, and other general corporate purposes (our “Unsecured Revolving Credit Facility”), (ii) a £150.0 million term loan (our “Term Loan”), and (iii) a €96.5 million delayed draw term loan (our “Delayed Draw Term Loan”). We refer to our Term Loan and Delayed Draw Term Loan collectively as the “Unsecured Term Loans” and the entire facility collectively as our “Senior Unsecured Credit Facility.”

The Senior Unsecured Credit Facility includes the ability to borrow in certain currencies other than U.S. dollars and has a maturity date of February 20, 2025. The aggregate principal amount (of revolving and term loans) available under the Senior Unsecured Credit Facility may be increased up to an amount not to exceed the U.S. dollar equivalent of $2.75 billion, subject to the conditions to increase set forth in our credit agreement.

As of both June 30, 2021 and December 31, 2020, we have drawn down our Unsecured Term Loans in full.

At June 30, 2021, our Unsecured Revolving Credit Facility had available capacity of approximately $1.5 billion (net of amounts reserved for standby letters of credit totaling $19.2 million). We incur an annual facility fee of 0.20% of the total commitment on our Unsecured Revolving Credit Facility, which is included within Interest expense in our consolidated statements of income.

The following table presents a summary of our Senior Unsecured Credit Facility (dollars in thousands):

	Interest Rate at June 30, 2021 (a)	Maturity Date at June 30, 2021	Principal Outstanding Balance at
Senior Unsecured Credit Facility			June 30, 2021		December 31, 2020
Unsecured Term Loans:
Term Loan — borrowing in British pounds sterling (b) (c)	GBP LIBOR + 0.95%	2/20/2025	$	207,750	$	204,737
Delayed Draw Term Loan — borrowing in euros (d)	EURIBOR + 0.95%	2/20/2025	114,681		118,415
			322,431		323,152
Unsecured Revolving Credit Facility:
Borrowing in British pounds sterling (c)	GBP LIBOR + 0.85%	2/20/2025	175,895		—
Borrowing in euros (d)	EURIBOR + 0.85%	2/20/2025	78,435		58,901
Borrowing in Japanese yen (c)	JPY LIBOR + 0.85%	2/20/2025	21,791		23,380
			276,121		82,281
			$	598,552	$	405,433

__________

(a)The applicable interest rate at June 30, 2021 was based on the credit rating for our Senior Unsecured Notes of BBB/Baa2.

(b)Balance excludes unamortized discount of $1.0 million and $1.2 million at June 30, 2021 and December 31, 2020, respectively.

(c)LIBOR means London Interbank Offered Rate.

(d)EURIBOR means Euro Interbank Offered Rate.

Senior Unsecured Notes

As set forth in the table below, we have euro and U.S. dollar-denominated senior unsecured notes outstanding with an aggregate principal balance outstanding of $5.6 billion at June 30, 2021 (the “Senior Unsecured Notes”).

On February 25, 2021, we completed an underwritten public offering of $425.0 million of 2.250% Senior Notes due 2033, at a price of 98.722% of par value. These 2.250% Senior Notes due 2033 have a 12.1-year term and are scheduled to mature on April 1, 2033. Proceeds from this offering were used to prepay non-recourse mortgage loans totaling $426.9 million (including prepayment penalties), as described below.

On March 8, 2021, we completed an underwritten public offering of €525.0 million of 0.950% Senior Notes due 2030, at a price of 99.335% of par value, issued by our wholly owned finance subsidiary, WPC Eurobond B.V., and fully and unconditionally guaranteed by us. These 0.950% Senior Notes due 2030 have a 9.2-year term and are scheduled to mature on June 1, 2030. Proceeds from this offering were used to redeem the €500.0 million of 2.0% Senior Notes due 2023 in March 2021. In connection with this redemption, we paid a “make-whole” amount of $26.2 million (based on the exchange rate of the euro as of the date of redemption) and recognized a loss on extinguishment of $28.2 million, which is included within Other gains and (losses) on our consolidated statements of income.

Interest on the Senior Unsecured Notes is payable annually in arrears for our euro-denominated senior notes and semi-annually for U.S. dollar-denominated senior notes. The Senior Unsecured Notes can be redeemed at par within three months of their respective maturities, or we can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 30 to 35 basis points. The following table presents a summary of our Senior Unsecured Notes outstanding at June 30, 2021 (currency in thousands):

		Principal Amount		Coupon Rate		Maturity Date	Principal Outstanding Balance at
Senior Unsecured Notes, net (a)	Issue Date						June 30, 2021		December 31, 2020
2.0% Senior Notes due 2023	1/21/2015	€	500,000	2.0	%	Redeemed	$	—	$	613,550
4.6% Senior Notes due 2024	3/14/2014	$	500,000	4.6	%	4/1/2024	500,000		500,000
2.25% Senior Notes due 2024	1/19/2017	€	500,000	2.25	%	7/19/2024	594,200		613,550
4.0% Senior Notes due 2025	1/26/2015	$	450,000	4.0	%	2/1/2025	450,000		450,000
2.250% Senior Notes due 2026	10/9/2018	€	500,000	2.250	%	4/9/2026	594,200		613,550
4.25% Senior Notes due 2026	9/12/2016	$	350,000	4.25	%	10/1/2026	350,000		350,000
2.125% Senior Notes due 2027	3/6/2018	€	500,000	2.125	%	4/15/2027	594,200		613,550
1.350% Senior Notes due 2028	9/19/2019	€	500,000	1.350	%	4/15/2028	594,200		613,550
3.850% Senior Notes due 2029	6/14/2019	$	325,000	3.850	%	7/15/2029	325,000		325,000
0.950% Senior Notes due 2030	3/8/2021	€	525,000	0.950	%	6/1/2030	623,910		—
2.400% Senior Notes due 2031	10/14/2020	$	500,000	2.400	%	2/1/2031	500,000		500,000
2.250% Senior Notes due 2033	2/25/2021	$	425,000	2.250	%	4/1/2033	425,000		—
							$	5,550,710	$	5,192,750

__________

(a)Aggregate balance excludes unamortized deferred financing costs totaling $28.5 million and $23.8 million, and unamortized discount totaling $28.6 million and $22.5 million, at June 30, 2021 and December 31, 2020, respectively.

In connection with the offering of the 2.250% Senior Notes due 2033 in February 2021 and the 0.950% Senior Notes due 2030 in March 2021, we incurred financing costs totaling $8.2 million during the six months ended June 30, 2021, which are included in Senior Unsecured Notes, net in the consolidated financial statements and are being amortized to Interest expense over the term of their respective Senior Notes.

Covenants

The Credit Agreement, each of the Senior Unsecured Notes, and certain of our non-recourse mortgage loan agreements include customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter. There have been no significant changes in our debt covenants from what was disclosed in the 2020 Annual Report (which are consistent with debt covenants for the Senior Unsecured Notes issued during the six months ended June 30, 2021). We were in compliance with all of these covenants at June 30, 2021.

Non-Recourse Mortgages

At June 30, 2021, the weighted-average interest rate for our total non-recourse mortgage notes payable was 4.1% (fixed-rate and variable-rate non-recourse mortgage notes payable were 4.7% and 2.1%, respectively), with maturity dates ranging from July 2021 to September 2031.

Repayments During the Six Months Ended June 30, 2021

During the six months ended June 30, 2021, we (i) prepaid non-recourse mortgage loans totaling $426.9 million, and (ii) repaid a non-recourse mortgage loan at maturity with a principal balance of approximately $3.0 million. We recognized an aggregate net loss on extinguishment of debt of $31.9 million on these repayments, primarily comprised of prepayment penalties totaling $31.8 million, which is included within Other gains and (losses) on our consolidated statements of income. The weighted-average interest rate for these non-recourse mortgage loans on their respective dates of repayment was 5.1%. We funded these prepayments primarily using proceeds from the issuance of the $425.0 million of 2.250% Senior Notes due 2033.

Repayments During the Six Months Ended June 30, 2020

During the six months ended June 30, 2020, we repaid non-recourse mortgage loans at maturity with an aggregate principal balance of approximately $10.2 million and a weighted-average interest rate of 4.5%.

Foreign Currency Exchange Rate Impact

During the six months ended June 30, 2021, the U.S. dollar strengthened against the euro, resulting in an aggregate decrease of $106.8 million in the aggregate carrying values of our Non-recourse mortgages, net, Senior Unsecured Credit Facility, and Senior Unsecured Notes, net from December 31, 2020 to June 30, 2021.

Scheduled Debt Principal Payments

Scheduled debt principal payments as of June 30, 2021 are as follows (in thousands):

Years Ending December 31,	Total (a)
2021 (remainder)	$	36,690
2022	312,468
2023	204,990
2024	1,136,097
2025	1,143,513
Thereafter through 2031	4,044,163
Total principal payments	6,877,921
Unamortized discount, net (b)	(33,386)
Unamortized deferred financing costs	(28,688)
Total	$	6,815,847

__________

(a)Certain amounts are based on the applicable foreign currency exchange rate at June 30, 2021.

(b)Represents the unamortized discount on the Senior Unsecured Notes of $28.6 million in aggregate, unamortized discount, net, of $3.8 million in aggregate primarily resulting from the assumption of property-level debt in connection with business combinations, and unamortized discount of $1.0 million on the Term Loan.