Debt Transactions

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt Transactions

5. DEBT TRANSACTIONS

On February 16, 2016, in conjunction with the Pensacola Transaction, the Company obtained $35.0 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.38% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.4 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On January 26, 2016, in conjunction with the Pine Ridge Transaction, the Company obtained approximately $11.3 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.50% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

The Company issued standby letters of credit, totaling approximately $3.9 million, for the benefit of Hartford Financial Services (“Hartford”) associated with the administration of workers compensation.

The Company issued standby letters of credit, totaling approximately $6.6 million, for the benefit of Welltower, Inc. (“Welltower”), formerly Healthcare REIT, Inc. on certain leases between Welltower and the Company.

The Company issued standby letters of credit, totaling approximately $2.7 million, for the benefit of HCP, Inc. (“HCP”) on certain leases between HCP and the Company.

The senior housing communities owned by the Company and encumbered by mortgage debt are provided as collateral under their respective loan agreements. At March 31, 2016 and December 31, 2015, these communities carried a total net book value of approximately $876.3 million and $818.7 million, respectively, with total mortgage loans outstanding, excluding deferred loan costs, of approximately $818.3 million and $777.1 million, respectively.

In connection with the Company’s loan commitments described above, the Company incurred financing charges that were deferred and amortized over the terms of the respective notes. At March 31, 2016 and December 31, 2015, the Company had gross deferred loan costs of approximately $10.9 million and $10.3 million, respectively. Accumulated amortization was approximately $2.1 million and $1.8 million at March 31, 2016 and December 31, 2015, respectively. The Company was in compliance with all aspects of its outstanding indebtedness at March 31, 2016, and December 31, 2015.