Line of Credit and Notes Payable

During the year ended December 31, 2011, Piedmont assumed and subsequently exercised its extension options to extend the maturity dates of the $140 Million 500 W. Monroe Mortgage Loan and the $45 Million 500 W. Monroe Mezzanine 1-A Loan Participation to August 9, 2012. On November 17, 2011, Piedmont paid $43.9 million to the respective lenders in full satisfaction of the $45 Million 500 W. Monroe Mezzanine I Loan- A Participation. Piedmont did not incur a defeasance or yield maintenance penalty and recognized a gain on the early extinguishment of debt of approximately $1.0 million, which was net of the recognition of the remaining unamortized deferred financing costs associated with the loan of approximately $0.1 million. Further, on January 9, 2012, Piedmont repaid $140 million in full satisfaction of the $140 Million 500 W. Monroe Mortgage Loan.

Effective May 18, 2011, Piedmont exercised its extension option on the maturity date of the $500 Million Unsecured Facility for one year to August 30, 2012 upon payment of a 15 basis point extension fee. Further, on June 28, 2011, Piedmont repaid the $250 Million Unsecured Term Loan using proceeds from its $500 Million Unsecured Facility.

On November 22, 2011, Piedmont entered into an $300 million unsecured term loan facility (the "$300 Million Unsecured Term Loan") with a consortium of lenders with a term of five years, maturing on November 22, 2016. Additionally, Piedmont may request up to four times during the term of the agreement to establish one or more new term loan commitments up to an aggregate amount of $200 million, provided that no single request is less than $25 million. The maturity date of such additional requests, if exercised, would be coterminous with the original maturity date of the term loan agreement. The $300 Million Unsecured Term Loan has the option to bear interest at varying levels based on (i) the London Interbank Offered Rate (“LIBOR”) or Base Rate, defined as the greater of the prime rate, the federal funds rate plus 0.50%, or LIBOR for a one-month period plus 1% if a LIBOR loan has been selected, (ii) the credit rating levels issued for Piedmont, and (iii) for LIBOR loans, an interest period selected by Piedmont. The stated interest rate spread over LIBOR can vary from 1.1% to 2.25% based upon the then current credit rating of Piedmont, which is 1.45% as of the closing of the facility.

In connection with obtaining the $300 Million Unsecured Term Loan, Piedmont entered into interest rate swap agreements with several counterparties for the full outstanding balance of the loan as of the closing date. The effective date of each interest rate swap agreement is November 22, 2011, and each agreement terminates on November 22, 2016. Piedmont will pay monthly interest at the stated rate mentioned above of LIBOR (or Base Rate) plus the applicable spread and will, in addition, pay funds to or receive funds from the counterparties depending on the level of interest rates. Therefore, after considering the terms of the swap agreements and Piedmont's current credit rating, Piedmont’s cash expenditure for interest will be effectively fixed, exclusive of changes to Piedmont's credit rating, at 2.69%.

On December 15, 2011, Piedmont sold its interest in the office property known as the 35 West Wacker Drive building. The property is encumbered by a mortgage note, which was assumed by the purchaser as part of the transaction. See Note 17 for additional information.

The following table summarizes the terms of Piedmont’s indebtedness outstanding as of December 31, 2011 and 2010 (in thousands):



Facility	Collateral	Rate⁽¹⁾			Maturity		Amount Outstanding as of December 31,
Facility	Collateral	Rate⁽¹⁾			Maturity		2011		2010
Secured (Fixed)
$45.0 Million Fixed-Rate Loan	4250 N. Fairfax	5.20	%		6/1/2012		$	45,000	$	45,000
$120.0 Million 35 West Wacker Drive Mortgage Note⁽²⁾	35 West Wacker Drive	5.10	%		1/1/2014		—		120,000
$200.0 Million Mortgage Note	Aon Center	4.87	%		5/1/2014		200,000		200,000
$25.0 Million Mortgage Note	Aon Center	5.70	%		5/1/2014		25,000		25,000
$350.0 Million Secured Pooled Facility	Nine Property Collateralized Pool⁽³⁾	4.84	%		6/7/2014		350,000		350,000
$105.0 Million Fixed-Rate Loan	US Bancorp Center	5.29	%		5/11/2015		105,000		105,000
$125.0 Million Fixed-Rate Loan	Four Property Collateralized Pool⁽⁴⁾	5.50	%		4/1/2016		125,000		125,000
$42.5 Million Fixed-Rate Loan	Las Colinas Corporate Center I & II	5.70	%		10/11/2016		42,525		42,525
$140.0 Million WDC Mortgage Notes	1201 & 1225 Eye Street	5.76	%		11/1/2017		140,000		140,000
$140.0 Million 500 W. Monroe Mortgage Loan	500 W. Monroe	LIBOR + 1.008%		⁽⁵⁾	8/9/2012	⁽⁶⁾	140,000		—
Subtotal/Weighted Average⁽⁷⁾		4.70	%				1,172,525		1,152,525
Unsecured (Variable)
$250 Million Unsecured Term Loan		LIBOR + 1.50%			6/28/2011		—		250,000
$300 Million Unsecured Term Loan		LIBOR + 1.45%		⁽⁸⁾	11/22/2016		300,000		—
$500 Million Unsecured Facility⁽⁹⁾		—	%		8/30/2012		—		—
Subtotal/Weighted Average⁽⁷⁾		2.69	%				300,000		250,000
Total/ Weighted Average⁽⁷⁾		4.29	%				$	1,472,525	$	1,402,525


⁽¹⁾	All of Piedmont’s outstanding debt as of December 31, 2011 and 2010 is interest-only debt.


⁽²⁾	On December 15, 2011, Piedmont sold its ownership interest in the 35 West Wacker Drive building. As part of the transaction, the buyer assumed the mortgage note secured by the property.


⁽³⁾	Nine property collateralized pool includes:1200 Crown Colony Drive, Braker Pointe III, 2 Gatehall Drive, the One and Two Independence Square, 2120 West End Avenue, 400 Bridgewater Crossing, 200 Bridgewater Crossing, and Fairway Center II.


⁽⁴⁾	Four property collateralized pool includes 1430 Enclave Parkway, Windy Point I and II, and 1055 East Colorado Boulevard.


⁽⁵⁾	Subject to interest rate cap agreements, which limit Piedmont's exposure to potential increases in the LIBOR rate to 2.19%.


⁽⁶⁾	Repaid in full on January 9, 2012.


⁽⁷⁾	Weighted average is based on contractual balance of outstanding debt and interest rates in the table as of December 31, 2011.


⁽⁸⁾	The $300 Million Unsecured Term Loan has a stated variable rate; however, Piedmont entered into interest rate swap agreements which effectively fix, exclusive of changes to Piedmont's credit rating, the rate on this facility to 2.69% through November 22, 2016.


⁽⁹⁾	Piedmont may select from multiple interest rate options with each draw, including the prime rate and various length LIBOR locks. All LIBOR selections are subject to an additional spread (0.475% as of December 31, 2011) over the selected rate based on Piedmont’s current credit rating.

A summary of the aggregate maturities of Piedmont’s indebtedness as of December 31, 2011, is provided below (in thousands):



2012	$	185,000	⁽¹⁾
2013	—
2014	575,000
2015	105,000
2016	467,525
Thereafter	140,000
Total	$	1,472,525


⁽¹⁾	Includes the $140 Million 500 W. Monroe Mortgage Loan, which Piedmont repaid on January 9, 2012.

Piedmont’s weighted-average interest rate as of December 31, 2011 and 2010, for aforementioned borrowings was approximately 4.29% and 4.66%, respectively. Piedmont made interest payments on all indebtedness, including interest rate swap cash settlements, of approximately $66.7 million, $70.2 million, and $75.0 million during the years ended December 31, 2011, 2010, and 2009, respectively.