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Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt DEBT
In March 2022, the Operating Partnership executed a public bond issuance by selling $400.0 million principal amount of 3.900% Senior Notes due 2029 (the "Notes Due 2029"). Interest on the Notes Due 2029 is paid semi-annually in arrears on April 1 and October 1 of each year. The Notes Due 2029 will mature on April 1, 2029, and the Operating Partnership may redeem the Notes Due 2029 at its option and sole discretion at any time prior to April 1, 2029 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In September 2021, the Operating Partnership executed a public bond issuance by selling $600.0 million principal amount of 2.350% Senior Notes due 2032 (the "Notes Due 2032"). Interest on the Notes Due 2032 is paid semi-annually in arrears on March 15 and September 15 of each year. The Notes Due 2032 will mature on March 15, 2032, and the Operating Partnership may redeem the Notes Due 2032 at its option and sole discretion at any time prior to March 15, 2032 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In May 2021, the Operating Partnership executed its initial public bond issuance by selling $450.0 million principal amount of 2.550% Senior Notes due 2031 (the "Notes Due 2031"). Interest on the Notes Due 2031 is paid semi-annually in arrears on June 1 and December 1 of each year. The Notes Due 2031 will mature on June 1, 2031, and the Operating Partnership may redeem the Notes Due 2031 at its option and sole discretion at any time prior to March 31, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
The Operating Partner may redeem the Notes Due 2029, the Notes Due 2031 and/or the Notes Due 2032 in whole at any time or in part from time to time, at the Operating Partnership’s option and sole discretion, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) a make-whole premium calculated in accordance with the indenture governing the notes, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date. Notwithstanding the foregoing, on or after the date three months prior to the maturity date of the applicable notes, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.
Certain events are considered events of default, which may result in the accelerated maturity of the Notes Due 2029, the Notes Due 2031 and/or the Notes Due 2032, including, among other things, a default for 30 days in the payment of any installment of interest under the notes or a default in the payment of the principal amount or redemption price due with respect to the notes, when the same become due and payable.
The Notes Due 2029, the Notes Due 2031 and the Notes Due 2032 are unsecured, and are fully and unconditionally guaranteed by the Company, ESS Holdings Business Trust I, and ESS Holdings Business Trust II (the "Guarantors," and together with the Operating Partnership, the "Obligated Group"), on a joint and several basis. The guarantee of the Notes Due 2031 and the Notes Due 2032 will be a senior unsecured obligation of each Guarantor. The Guarantors have no material operations separate from the operation of the Operating Partnership and no material assets, other than their respective investments directly or indirectly in the Operating Partnership, and therefore the assets, liabilities, and results of operations of the Obligated Group are not materially different than those reported in the Company's financial statements.
The components of term debt are summarized as follows:
Term DebtSeptember 30, 2022December 31, 2021Fixed Rate
Variable Rate (2)
Maturity Dates
Secured fixed-rate (1)
$526,722 $930,830 
2.46% - 4.50%
February 2023 - February 2030
Secured variable-rate (1)
774,375 392,679 
4.04% - 4.48%
August 2023 - September 2030
Unsecured fixed-rate3,840,376 3,575,000 
2.35% - 4.39%
January 2025 - March 2032
Unsecured variable-rate1,284,624 550,000 
4.09% - 4.39%
February 2024 - July 2029
Total6,426,097 5,448,509 
Less: Unamortized debt issuance costs(32,563)(25,762)
Total$6,393,534 $5,422,747 
(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.
(2) Basis rates include 30-day USD LIBOR, Term SOFR and Daily Simple SOFR.
The following table summarizes the scheduled maturities of term debt, excluding available extensions, at September 30, 2022:
2022$— 
2023391,725 
2024425,000 
2025711,202 
2026807,815 
Thereafter4,090,355 
$6,426,097 
As of September 30, 2022, the terms of the Second Amended and Restated Credit Agreement dated June 22, 2021 (the "Credit Agreement") are as follows:
Debt CapacityMaturity Date
Revolving Credit Facility$1,250,000 June 2025
Tranche 1 Term Loan Facility (1)
400,000 January 2027
Tranche 2 Term Loan Facility (1)
425,000 October 2026
Tranche 3 Term Loan Facility (1)
245,000 January 2025
Tranche 4 Term Loan Facility (1)
255,000 June 2026
Tranche 5 Term Loan Facility (1)
425,000 February 2024
Tranche 6 Term Loan Facility (1)
175,000 January 2028
Tranche 7 Term Loan Facility (1)
425,000 July 2029
$3,600,000 
(1) The term loan amounts have been fully drawn as of September 30, 2022.

Pursuant to the terms of the Credit Agreement, the Company may request an extension of the term of the revolving credit facility for up to two additional periods of six months each, after satisfying certain conditions.

As of September 30, 2022, amounts outstanding under the revolving credit facility bore interest at floating rates, at the Company’s option, equal to either (i) Term or Daily Simple SOFR plus the Applicable Margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.0%, (b) the federal funds rate plus 0.50%, (c) U.S. Bank’s prime rate or
(d) the SOFR rate plus 1.00%. Per the Credit Agreement, the applicable SOFR rate margin and applicable base rate margin are based on the Company’s achieved debt rating, with the SOFR rate margin ranging from 0.7% to 1.6% per annum and the applicable base rate margin ranging from 0.00% to 0.60% per annum.

The Credit Agreement is guaranteed by the Company and is not secured by any assets of the Company. The Company's unsecured debt is subject to certain financial covenants. As of September 30, 2022, the Company was in compliance with all of its financial covenants.

In July 2022, the Company completed an accordion transaction in its credit facility, which added a $175.0 million unsecured debt tranche maturing January 2028 and a $425.0 million unsecured debt tranche maturing July 2029. The current interest rates for the tranches are Adjusted Term SOFR/Adjusted Daily Simple SOFR ("ASOFR") + 0.95% and ASOFR + 1.25%, respectively.

On October 5, 2022, the Company executed two interest rate swap agreements with a total combined notional amount of $200 million. The interest rate swaps were designed as cash flow hedges, with two-year terms and all-in rates of 5.24% and 5.25%.
All of the Company’s lines of credit are guaranteed by the Company. The following table presents information on the Company’s lines of credit, the proceeds of which are used to repay debt and for general corporate purposes, for the periods indicated:
As of September 30, 2022
Revolving Lines of CreditAmount DrawnCapacityInterest RateMaturity
Basis Rate (1)
Credit Line 1 (2)
$15,000 $140,000 4.3%7/1/2023
SOFR plus 1.35%
Credit Line 2 (3)(4)
585,000 1,250,000 3.9%6/20/2025
SOFR plus 0.95%
$600,000 $1,390,000 
(1) Daily Simple SOFR
(2) Secured by mortgages on certain real estate assets. No remaining extensions available.
(3) Unsecured. Two six-month extensions available.
(4) Basis Rate as of September 30, 2022. Rate is subject to change based on the Company's investment grade rating.

As of September 30, 2022, the Company’s percentage of fixed-rate debt to total debt was 62.2%. The weighted average interest rates of the Company’s fixed and variable-rate debt were 3.2% and 4.2%, respectively. The combined weighted average interest rate was 3.6%.