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Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Debt Debt
During the nine months ended September 30, 2023, Piedmont OP issued $400 million in aggregate principal amount of 9.250% senior notes due 2028 (the “$400 Million Unsecured Senior Notes”), which mature on July 20, 2028. Upon issuance of the $400 Million Unsecured Senior Notes, Piedmont OP received proceeds of $396 million, reflecting a discount of $4 million which will be amortized as interest expense under the effective interest method over the 5-year term of the $400 Million Unsecured Senior Notes. The $400 Million Unsecured Senior Notes are fully and unconditionally guaranteed by Piedmont. Interest on the $400 Million Unsecured Senior Notes is payable semi-annually on January 20 and July 20 of each year commencing January 20, 2024, and is subject to adjustment if Piedmont's corporate credit rating falls below investment grade, as defined in the credit agreement.

The net proceeds from the $400 Million Unsecured Senior Notes were used to fund the purchase of approximately $350 million aggregate principal amount of Piedmont OP's 4.45% senior notes due 2024 that were validly tendered and accepted for purchase in a tender offer commenced substantially concurrently with the offering of the $400 Million Unsecured Senior Notes. In conjunction with the purchase, Piedmont recognized approximately $0.8 million of loss on early extinguishment of debt, comprised of the pro-rata write-off of unamortized debt issuance costs, as well as fees paid. The remaining proceeds from $400 Million Unsecured Senior Notes were used to repay a portion of the borrowings outstanding under the $600 Million Unsecured 2022 Line of Credit.

The $400 Million Unsecured Senior Notes are subject to certain typical covenants that, subject to certain exceptions including (a) a limitation on the ability of Piedmont and Piedmont OP to, among other things, incur additional secured and unsecured indebtedness; (b) a limitation on the ability of Piedmont and Piedmont OP to merge, consolidate, sell, lease or otherwise dispose of their properties and assets substantially as an entirety; and (c) a requirement that Piedmont maintain a pool of unencumbered assets.
During the nine months ended September 30, 2023, Piedmont fully repaid the $350 Million Unsecured Senior Notes, using cash on hand, proceeds from the $215 Million Unsecured 2023 Term Loan discussed below, and borrowings under the $600 Million Unsecured 2022 Line of Credit.

During the nine months ended September 30, 2023, Piedmont entered into a new $215 million, floating-rate, unsecured term loan facility (the “$215 Million Unsecured 2023 Term Loan”). The term of the $215 Million Unsecured 2023 Term Loan is one year, with an option to extend for an additional one year for a final maturity date of January 31, 2025. Piedmont may prepay the loan in whole or in part, at any time without premium or penalty. The stated interest rate spread over Adjusted SOFR can vary from 0.85% to 1.70% based upon the then current credit rating of Piedmont. As of September 30, 2023, the applicable interest rate spread on the loan was 1.05%, and the effective rate was 6.45%.

The $215 Million Unsecured 2023 Term Loan has certain financial covenants that require, among other things, the maintenance of an unencumbered interest rate coverage ratio of at least 1.75, an unencumbered leverage ratio of at least 1.60, a fixed charge coverage ratio of at least 1.50, a leverage ratio of no more than 0.60, and a secured debt ratio of no more than 0.40.

Finally, during the nine months ended September 30, 2023, Piedmont amended its $250 million, floating-rate, unsecured term loan facility (the "$250 Million Unsecured 2018 Term Loan") to convert the reference interest rate from LIBOR to SOFR, along with the various other related amendments necessary to affect this conversion.

The following table summarizes the terms of Piedmont’s indebtedness outstanding as of September 30, 2023 and December 31, 2022 (in thousands):

Facility (1)
Stated Rate
Effective Rate (2)
MaturityAmount Outstanding as of
September 30, 2023December 31, 2022
Secured (Fixed)
$197 Million Fixed Rate Mortgage
4.10 %4.10 %10/1/2028$196,721 $197,000 
Subtotal196,721 197,000 
Unsecured (Variable and Fixed)
$350 Million Unsecured Senior Notes due 2023
3.40 %3.43 %6/01/2023— 350,000 
$215 Million Unsecured 2023 Term Loan
SOFR + 1.05%
6.45 %
(3)
1/31/2024
(4)
215,000 — 
$400 Million Unsecured Senior Notes due 2024
4.45 %4.10 %3/15/2024
(5)
50,154 400,000 
$200 Million Unsecured 2022 Term Loan Facility
SOFR + 1.00%
6.43 %
(3)
12/16/2024
(6)
200,000 200,000 
$250 Million Unsecured 2018 Term Loan
SOFR + 0.95%
4.54 %3/31/2025250,000 250,000 
$600 Million Unsecured 2022 Line of Credit
SOFR + 0.84%
6.24 %
(3)
6/30/2026
(7)
157,000 — 
$400 Million Unsecured Senior Notes due 2028
9.25 %9.50 %7/20/2028400,000 — 
$300 Million Unsecured Senior Notes due 2030
3.15 %3.90 %

8/15/2030300,000 300,000 
$300 Million Unsecured Senior Notes due 2032
2.75 %2.78 %

4/1/2032300,000 300,000 
Discounts and unamortized debt issuance costs
(18,556)(13,319)
Subtotal/Weighted Average (8)
5.60 %$1,853,598 $1,786,681 
Total/Weighted Average (8)
5.46 %$2,050,319 $1,983,681 

(1)All of Piedmont’s outstanding debt as of September 30, 2023 is unsecured and interest-only until maturity, except for the $197 Million Fixed Rate Mortgage, secured by 1180 Peachtree Street.
(2)Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts.
(3)On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length SOFR locks on all or a portion of the principal. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) and is subject to an additional spread over the selected rate based on Piedmont’s current credit rating.
(4)Piedmont may extend the term for an additional year to a final extended maturity date of January 31, 2025 provided Piedmont is not then in default and upon payment of extension fees.
(5)Piedmont currently intends to repay the outstanding $50.2 million balance on the $400 Million Unsecured Senior Notes due 2024 through selective property dispositions, cash on hand from operations, and/or borrowings under its existing $600 Million Unsecured 2022 Line of Credit.
(6)Piedmont may extend the term for six additional months to a final extended maturity date of June 18, 2025, provided Piedmont is not then in default and all representations and warranties are true and correct in all material respects and upon payment of extension fees.
(7)Piedmont may extend the term for up to one additional year (through two available six month extensions to a final extended maturity date of June 30, 2027) provided Piedmont is not then in default and upon payment of extension fees.
(8)Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of September 30, 2023.

Piedmont made interest payments on all debt facilities, including interest rate swap cash settlements, of approximately $24.9 million and $18.3 million for the three months ended September 30, 2023 and 2022, respectively, and approximately $70.0 million and $46.9 million for the nine months ended September 30, 2023 and 2022, respectively. Also, Piedmont capitalized interest of approximately $1.9 million and $1.1 million for the three months ended September 30, 2023 and 2022, respectively, and approximately $4.5 million and $3.2 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, Piedmont believes it was in compliance with all financial covenants associated with its debt instruments.

See Note 5 for a description of Piedmont’s estimated fair value of debt as of September 30, 2023.