Indebtedness

12 Months Ended

Dec. 31, 2019

Indebtedness

Indebtedness

7. Indebtedness

Our mortgages and unsecured indebtedness, excluding the impact of derivative instruments, consist of the following as of December 31:

	2019		2018
Fixed-Rate Debt:
Mortgage notes, including $6,775 and $11,822 of net premiums and $15,195 and $14,522 of debt issuance costs, respectively. Weighted average interest and maturity of 3.87% and 4.8 years at December 31, 2019.	$	6,156,595	$	6,099,787
Unsecured notes, including $54,976 and $44,691 of net discounts and $70,297 and $58,822 of debt issuance costs, respectively. Weighted average interest and maturity of 3.07% and 9.3 years at December 31, 2019.		15,747,267		15,535,468
Commercial Paper (see below)		1,327,050		758,681
Total Fixed-Rate Debt		23,230,912		22,393,936
Variable-Rate Debt:
Mortgages notes, including $4,721 and $5,901 of debt issuance costs, respectively. Weighted average interest and maturity of 2.62% and 2.0 years at December 31, 2019.		751,130		736,274
Credit Facility (see below), including $11,067 and $16,930 of debt issuance costs, respectively, at December 31, 2019.		113,933		108,070
Total Variable-Rate Debt		865,063		844,344
Other Debt Obligations		67,255		67,255
Total Mortgages and Unsecured Indebtedness	$	24,163,230	$	23,305,535

General.  Our unsecured debt agreements contain financial covenants and other non-financial covenants. If we were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lender, including adjustments to the applicable interest rate. As of December 31, 2019, we were in compliance with all covenants of our unsecured debt.

At December 31, 2019, our consolidated subsidiaries were the borrowers under 46 non-recourse mortgage notes secured by mortgages on 50 properties and other assets, including two separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of five properties. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties that serve as collateral for that debt. If the applicable borrower under these non-recourse mortgage notes were to fail to comply with these covenants, the lender could accelerate the debt and enforce its rights against their collateral. At December 31, 2019, the applicable borrowers under these non-recourse mortgage notes were in compliance with all covenants where non-compliance could individually or in the aggregate, giving effect to applicable cross-default provisions, have a material adverse effect on our financial condition, liquidity or results of operations.

Unsecured Debt

At December 31, 2019, our unsecured debt consisted of $15.9 billion of senior unsecured notes of the Operating Partnership, $125.0 million outstanding under the Operating Partnership’s $4.0 billion unsecured revolving credit facility, or Credit Facility, and $1.3 billion outstanding under the Operating Partnership’s global unsecured commercial paper program, or Commercial Paper program.  

On December 31, 2019, we had an aggregate available borrowing capacity of $6.0 billion under the Credit Facility and the Operating Partnership’s $3.5 billion unsecured revolving credit facility, or Supplemental Facility, and together with the Credit Facility, the Credit Facilities. The maximum aggregate outstanding balance under the Credit Facilities during the year ended December 31, 2019 was $130.7 million and the weighted average outstanding balance was $125.1 million. Letters of credit of $11.4 million were outstanding under the Credit Facilities as of December 31, 2019.

The Credit Facility’s initial borrowing capacity of $4.0 billion may be increased to $5.0 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Sterling, Canadian dollars and Australian dollars.  Borrowings in currencies other than the U.S. dollar are limited to 95% of the maximum revolving credit amount, as defined.  The initial maturity date of the Credit Facility is June 30, 2021 and can be extended for an additional year to June 30, 2022 at our sole option, subject to our continued compliance with the terms thereof.  The base interest rate on the Credit Facility is LIBOR plus 77.5 basis points with an additional facility fee of 10 basis points.

The Supplemental Facility’s initial borrowing capacity of $3.5 billion may be increased to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Sterling, Canadian dollars and Australian dollars. The initial maturity date of the Supplemental Facility was extended to June 30, 2022 and can be extended for an additional year to June 30, 2023 at our sole option, subject to our continued compliance with the terms thereof. The base interest rate on the Supplemental Facility is LIBOR plus 77.5 basis points, with an additional facility fee of 10 basis points.

The Operating Partnership also has available a Commercial Paper program of $2.0 billion, or the non-U.S. dollar equivalent thereof. The Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The Commercial Paper program is supported by the Credit Facilities and if necessary or appropriate, we may make one or more draws under either of the Credit Facilities to pay amounts outstanding from time to time on the Commercial Paper program. On December 31, 2019, we had $1.3 billion outstanding under the Commercial Paper program, of which $1.0 billion was comprised of U.S. dollar denominated notes with a weighted average interest rate of 1.72% and $269.2 million was comprised of Euro denominated notes with a weighted average interest rate of (0.38%).  These borrowings have a weighted average maturity date of March 6, 2020 and reduce amounts otherwise available under the Credit Facilities.

On February 1, 2019, the Operating Partnership repaid at maturity $600.0 million of senior unsecured notes with a fixed interest rate of 2.20%.

On September 13, 2019 the Operating Partnership completed the issuance of the following senior unsecured notes: $1.0 billion with a fixed interest rate of 2.00%, $1.25 billion with a fixed interest rate of 2.45%, and $1.25 billion with a fixed interest rate of 3.25%, with maturity dates of September 13 of 2024, 2029, and 2049, respectively. Proceeds from the unsecured notes offering funded the early redemption of senior unsecured notes in October 2019, as discussed below, and repaid a portion of the indebtedness outstanding under the Commercial Paper program.

On October 7, 2019, the Operating Partnership completed the early redemption of its $900 million 4.375% notes due March 1, 2021, $700 million 4.125% notes due December 1, 2021, $600 million 3.375% notes due March 15, 2022 and €375 million of the €750 million 2.375% notes due October 2, 2020.  We recorded a $116.3 million loss on extinguishment of debt in the fourth quarter as a result of the early redemption.

Mortgage Debt

Total mortgage indebtedness was $6.9 billion and $6.8 billion at December 31, 2019 and 2018, respectively.

Debt Maturity and Other

Our scheduled principal repayments on indebtedness as of December 31, 2019 are as follows:

2020	$	2,857,060	(1)
2021		1,541,478
2022		2,872,980
2023		1,868,669
2024		2,896,466
Thereafter		12,208,803
Total principal maturities		24,245,456
Net unamortized debt premium		6,775
Net unamortized debt discount		(54,976)
Debt issuance costs, net		(101,280)
Other Debt Obligations		67,255
Total mortgages and unsecured indebtedness	$	24,163,230

(1) Includes $1.3 billion in Global Commercial Paper.

Our cash paid for interest in each period, net of any amounts capitalized, was as follows:

	For the Year Ended December 31,
	2019		2018		2017
Cash paid for interest	$	803,728	$	811,971	$	814,729

Debt Issuance Costs

Our debt issuance costs consist primarily of financing fees we incurred in order to obtain long-term financing. We record amortization of debt issuance costs on a straight-line basis over the terms of the respective loans or agreements. Details of those debt issuance costs as of December 31 are as follows:

	2019		2018
Debt issuance costs	$	187,514	$	204,189
Accumulated amortization		(86,234)		(108,014)
Debt issuance costs, net	$	101,280	$	96,175

We report amortization of debt issuance costs, amortization of premiums, and accretion of discounts as part of interest expense. We amortize debt premiums and discounts, which are included in mortgages and unsecured indebtedness, over the remaining terms of the related debt instruments. These debt premiums or discounts arise either at the time of the debt issuance or as part of purchase accounting for the fair value of debt assumed in acquisitions. The accompanying consolidated statements of operations and comprehensive income include amortization as follows:

		For the Year Ended December 31,
	2019		2018		2017
Amortization of debt issuance costs	$	21,499	$	21,445	$	21,707
Amortization of debt discounts/(premiums)		1,571		1,618		1,357

Fair Value of Debt

The carrying value of our variable-rate mortgages and other loans approximates their fair values. We estimate the fair values of consolidated fixed-rate mortgages using cash flows discounted at current borrowing rates and other indebtedness using cash flows discounted at current market rates. We estimate the fair values of consolidated fixed-rate unsecured notes using quoted market prices, or, if no quoted market prices are available, we use quoted market prices for securities with similar terms and maturities. The book value of our consolidated fixed-rate mortgages and unsecured indebtedness including commercial paper was $23.2 billion and $22.4 billion as of December 31, 2019 and 2018, respectively. The fair values of these financial instruments and the related discount rate assumptions as of December 31 are summarized as follows:

	December 31,			December 31,
	2019			2018
Fair value of consolidated fixed rate mortgages and unsecured indebtedness	$	23,231		$	22,323
Weighted average discount rates assumed in calculation of fair value for fixed rate mortgages		3.75	%		4.55	%
Weighted average discount rates assumed in calculation of fair value for unsecured indebtedness		3.67	%		4.50	%