DEBT

Debt of American Assets Trust, Inc.

American Assets Trust, Inc. does not hold any indebtedness. All debt is held directly or indirectly by the Operating Partnership; however, American Assets Trust, Inc. and certain of its subsidiaries have guaranteed the Operating Partnership's obligations under the (i) amended and restated credit facility, (ii) term loan and (iii) senior guaranteed notes. Additionally, American Assets Trust, Inc. has provided carve-out guarantees on certain property-level debt.

Debt of American Assets Trust, L.P.

Secured notes payable

The following is a summary of our total secured notes payable outstanding as of March 31, 2017 and December 31, 2016 (in thousands):



	Principal Balance as of						Stated Interest Rate		Stated Maturity Date
Description of Debt	March 31, 2017			December 31, 2016			as of March 31, 2017		Stated Maturity Date
Waikiki Beach Walk—Retail ⁽¹⁾⁽²⁾	$	—		$	130,310		5.39	%	July 1, 2017
Solana Beach Corporate Centre III-IV ⁽³⁾⁽⁴⁾	35,306			35,440			6.39	%	August 1, 2017
Loma Palisades ⁽¹⁾	73,744			73,744			6.09	%	July 1, 2018
One Beach Street ⁽¹⁾	21,900			21,900			3.94	%	April 1, 2019
Torrey Reserve—North Court ⁽³⁾	20,308			20,399			7.22	%	June 1, 2019
Torrey Reserve—VCI, VCII, VCIII ⁽³⁾	6,853			6,884			6.36	%	June 1, 2020
Solana Beach Corporate Centre I-II ⁽³⁾	10,875			10,927			5.91	%	June 1, 2020
Solana Beach Towne Centre ⁽³⁾	36,249			36,424			5.91	%	June 1, 2020
City Center Bellevue ⁽¹⁾	111,000			111,000			3.98	%	November 1, 2022
	316,235			447,028
Unamortized fair value adjustment	(31		)	(1,347		)
Debt issuance costs, net of accumulated amortization of $1,069 and $1,029, respectively	(461		)	(501		)
Total Secured Notes Payable Outstanding	$	315,743		$	445,180


(1)	Interest only.


(2)	Loan repaid in full, without premium or penalty, on March 1, 2017.


(3)	Principal payments based on a 30-year amortization schedule.


(4)	Loan repaid in full, without premium or penalty, on April 3, 2017.

Certain loans require us to comply with various financial covenants. As of March 31, 2017, the Operating Partnership was in compliance with these financial covenants.

Unsecured notes payable

The following is a summary of the Operating Partnership's total unsecured notes payable outstanding as of March 31, 2017 and December 31, 2016 (in thousands):



Description of Debt	Principal Balance as of						Stated Interest Rate			Stated Maturity Date
Description of Debt	March 31, 2017			December 31, 2016			as of March 31, 2017			Stated Maturity Date
Term Loan A	$	100,000		$	100,000		Variable		⁽¹⁾	January 9, 2019	⁽²⁾
Senior Guaranteed Notes, Series A	150,000			150,000			4.04	%	⁽³⁾	October 31, 2021
Senior Guaranteed Notes, Series B	100,000			100,000			4.45	%		February 2, 2025
Senior Guaranteed Notes, Series C	100,000			100,000			4.50	%		April 1, 2025
Term Loan B	100,000			100,000			Variable		⁽⁴⁾	March 1, 2023
Term Loan C	50,000			50,000			Variable		⁽⁵⁾	March 1, 2023
Senior Guaranteed Notes, Series D	250,000			—			4.29	%	⁽⁶⁾	March 1, 2027
	850,000			600,000
Debt issuance costs, net of accumulated amortization of $4,675 and $4,317, respectively	(5,248		)	(3,650		)
Total Unsecured Notes Payable	$	844,752		$	596,350


(1)	The Operating Partnership has entered into an interest rate swap agreement that is intended to fix the interest rate associated with Term Loan A at approximately 3.08% through its maturity date and extension options, subject to adjustments based on our consolidated leverage ratio.


(2)	The Operating Partnership has an option to extend the term loan up to one time, with such extension for a 12-month period. The foregoing extension option is exercisable by us subject to the satisfaction of certain conditions.


(3)	The Operating Partnership entered into a one-month forward-starting seven-year swap contract on August 19, 2014, which was settled on September 19, 2014 at a gain of approximately $1.6 million. The forward-starting seven-year swap contract was deemed to be a highly effective cash flow hedge, accordingly, the effective interest rate in accordance with GAAP is approximately 3.88% per annum.


(4)	The Operating Partnership has entered into an interest rate swap agreement that is intended to fix the interest rate associated with Term Loan B at approximately 3.15% through its maturity date, subject to adjustments based on our consolidated leverage ratio.


(5)	The Operating Partnership has entered into an interest rate swap agreement that is intended to fix the interest rate associated with Term Loan C at approximately 3.14% through its maturity date, subject to adjustments based on our consolidated leverage ratio.

(6)

The Operating Partnership entered into forward-starting interest rate swap contracts on March 29, 2016 and April 7, 2016, which were settled on January 18, 2017 at a gain of approximately $10.4 million. The forward-starting interest swap rate contracts were deemed to be a highly effective cash flow hedge, accordingly, the effective interest rate in accordance with GAAP is approximately 3.87% per annum.

On March 1, 2017, the Operating Partnership entered into a Note Purchase Agreement for the private placement of $250 million of 4.29% Senior Guaranteed Notes, Series D, due March 1, 2027 (the "Series D Notes"). The Series D Notes were issued on March 1, 2017 and will pay interest quarterly on the last day of January, April, July and October until their respective maturities.

The Operating Partnership may prepay at any time all, or from time to time any part of, the Series D Notes, in an amount not less than 5% of the aggregate principal amount of any series of the Series D Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the Note Purchase Agreement).

The Note Purchase Agreement contains a number of customary financial covenants, including, without limitation, tangible net worth thresholds, secured and unsecured leverage ratios and fixed charge coverage ratios. Subject to the terms of the Note Purchase Agreement and the Series D Notes, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal, Make-Whole Amount or interest under the Series D Notes, and (ii) a default in the payment of certain other indebtedness of the Operating Partnership, the Company or their subsidiaries, the principal and accrued and unpaid interest and the Make-Whole Amount on the outstanding Series D Notes will become due and payable at the option of the Purchasers.

The Operating Partnership’s obligations under the Series D Notes are fully and unconditionally guaranteed by the Company and certain of their subsidiaries.

Certain loans require us to comply with various financial covenants. As of March 31, 2017, the Operating Partnership was in compliance with these financial covenants.

Credit Facility

On January 9, 2014, the Operating Partnership entered into an amended and restated credit agreement (the "Amended and Restated Credit Facility") which amended and restated the then in-place credit facility. The Amended and Restated Credit Facility provides for aggregate, unsecured borrowing of $350 million, consisting of a revolving line of credit of $250 million ("Revolver Loan") and a term loan of $100 million ("Term Loan A"). The Amended and Restated Credit Facility has an accordion feature that may allow the Operating Partnership to increase the availability thereunder up to an additional $250 million, subject to meeting specified requirements and obtaining additional commitments from lenders. At March 31, 2017, there was no outstanding balance under the Revolver Loan.

Borrowings under the Amended and Restated Credit Facility initially bear interest at floating rates equal to, at our option, either (1) LIBOR, plus a spread which ranges from (a) 1.35%-1.95% (with respect to the Revolver Loan) and (b) 1.30% to 1.90% (with respect to Term Loan A), in each case based on our consolidated leverage ratio, or (2) a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 bps or (c) the Eurodollar rate plus 100 bps, plus a spread which ranges from (i) 0.35%-0.95% (with respect to the Revolver Loan) and (ii) 0.30% to 0.90% (with respect to Term Loan A), in each case based on our consolidated leverage ratio.

The Revolver Loan initially matures on January 9, 2018, subject to the Operating Partnership's option to extend the Revolver Loan up to two times, with each such extension for a six-month period. Term Loan A initially matures on January 9, 2016, subject to the Operating Partnership's option to extend Term Loan A up to three times, with each such extension for a 12-month period. The foregoing extension options are exercisable by the Operating Partnership subject to the satisfaction of certain conditions. Effective as of January 9, 2017, the Operating Partnership exercised the second of three options to extend the maturity date of Term Loan A to January 9, 2018.

As of March 31, 2017, the Operating Partnership was in compliance with the Amended and Restated Credit Facility financial covenants.