Mortgage Notes Payable, Net

Mortgage notes payable, net as of March 31, 2018 and December 31, 2017 consisted of the following:



		Encumbered Properties	Outstanding Loan Amount ⁽¹⁾				Effective Interest Rate		Interest Rate
Country	Portfolio	Encumbered Properties	March 31, 2018		December 31, 2017		Effective Interest Rate		Interest Rate	Maturity
			(In thousands)		(In thousands)
Finland:	Finnair	4	$	34,999	$	34,022	2.2%	⁽²⁾	Fixed	Sep. 2020
	Tokmanni	1	35,708		34,711		2.4%	⁽²⁾	Fixed	Oct. 2020

France:	Auchan	1	10,229		9,943		1.7%	⁽²⁾	Fixed	Dec. 2019
	Pole Emploi	1	7,148		6,948		1.7%	⁽²⁾	Fixed	Dec. 2019
	Sagemcom	1	44,242		43,006		1.7%	⁽²⁾	Fixed	Dec. 2019
	Worldline	1	6,162		5,990		1.9%	⁽²⁾	Fixed	Jul. 2020
	DCNS	1	11,708		11,381		1.5%	⁽²⁾	Fixed	Dec. 2020
	ID Logistics II	2	12,940		12,578		1.3%		Fixed	Jun. 2021

Germany	Rheinmetall	1	13,063		12,698		2.6%	⁽²⁾	Fixed	Jan. 2019
	OBI DIY	1	5,546		5,391		2.4%		Fixed	Jan. 2019
	RWE AG	3	77,023		74,872		1.6%	⁽²⁾	Fixed	Oct. 2019
	Rexam	1	6,328		6,301		1.8%	⁽²⁾	Fixed	Oct. 2019
	Metro Tonic	1	32,658		31,746		1.7%	⁽²⁾	Fixed	Dec. 2019
	ID Logistics I	1	4,929		4,792		1.0%		Fixed	Oct. 2021

Luxembourg:	DB Luxembourg	1	44,365		43,126		1.4%	⁽²⁾	Fixed	May 2020
The Netherlands:	ING Amsterdam	1	54,224		52,710		1.7%	⁽²⁾	Fixed	Jun. 2020
	Total EUR denominated	22	401,272		390,215

United Kingdom:	McDonald's	—	—		1,025		4.1%	⁽²⁾	Fixed	Feb. 2018
	Wickes Building Supplies I	1	2,764		2,226		3.7%	⁽²⁾	Fixed	May 2018
	Everything Everywhere	1	5,605		5,397		4.0%	⁽²⁾	Fixed	Jun. 2018
	Thames Water	1	8,408		8,096		4.1%	⁽²⁾	Fixed	Jul. 2018
	Wickes Building Supplies II	1	2,626		2,626		4.2%	⁽²⁾	Fixed	Jul. 2018
	Northern Rock	2	7,357		7,084		4.4%	⁽²⁾	Fixed	Sep. 2018
	Wickes Building Supplies III	1	2,313		2,564		4.3%	⁽²⁾	Fixed	Nov. 2018
	Provident Financial	1	17,866		17,203		4.1%	⁽²⁾	Fixed	Feb. 2019
	Crown Crest	1	26,975		25,973		4.2%	⁽²⁾	Fixed	Feb. 2019
	Aviva	1	22,000		21,183		3.8%	⁽²⁾	Fixed	Mar. 2019
	Bradford & Bingley	1	10,594		10,200		3.5%	⁽²⁾	Fixed	May 2020
	Intier Automotive Interiors	1	6,621		6,375		3.5%	⁽²⁾	Fixed	May 2020
	Capgemini	1	6,628		6,381		3.2%	⁽²⁾	Fixed	Jun. 2020
	Fujitsu	3	34,724		33,435		3.2%	⁽²⁾	Fixed	Jun. 2020
	Amcor Packaging	7	4,380		4,218		3.5%	⁽²⁾	Fixed	Jul. 2020
	Fife Council	1	2,570		2,474		3.5%	⁽²⁾	Fixed	Jul. 2020
	Malthrust	3	4,484		4,318		3.5%	⁽²⁾	Fixed	Jul. 2020
	Talk Talk	1	5,360		5,161		3.5%	⁽²⁾	Fixed	Jul. 2020
	HBOS	3	7,553		7,272		3.5%	⁽²⁾	Fixed	Jul. 2020
	DFS Trading	5	14,208		13,680		3.4%	⁽²⁾	Fixed	Aug. 2020
	DFS Trading	2	3,326		3,203		3.4%	⁽²⁾	Fixed	Aug. 2020
	HP Enterprise Services	1	13,014		12,531		3.4%	⁽²⁾	Fixed	Aug. 2020



		Encumbered Properties	Outstanding Loan Amount ⁽¹⁾						Effective Interest Rate		Interest Rate
Country	Portfolio	Encumbered Properties	March 31, 2018			December 31, 2017			Effective Interest Rate		Interest Rate	Maturity
	Foster Wheeler	1	55,071			53,026			2.6%	⁽²⁾	Fixed	Oct. 2018
	Harper Collins	1	39,341			37,880			3.4%	⁽²⁾	Fixed	Oct. 2019
	NCR Dundee	1	7,903			7,610			2.9%	⁽²⁾	Fixed	Apr. 2020
	Total GBP denominated	42	311,691			301,141

United States:	Quest Diagnostics	1	52,800			52,800			2.8%	⁽³⁾	Variable	Sep. 2018
	Western Digital	1	17,277			17,363			5.3%		Fixed	Jul. 2021
	AT&T Services	1	33,550			33,550			2.9%	⁽⁴⁾	Variable	Dec. 2020
	FedEx Freight	1	6,165			6,165			4.5%		Fixed	Jun. 2021
	Veolia Water	1	4,110			4,110			4.5%		Fixed	Jun. 2021
	Multi-Tenant Mortgage Loan I	12	187,000			187,000			4.4%		Fixed	Nov. 2027
	Multi-Tenant Mortgage Loan II	8	32,750			—			4.4%		Fixed	Feb. 2028
	Total USD denominated	25	333,652			300,988
	Gross mortgage notes payable	89	1,046,615			992,344			2.8%
	Mortgage discount	—	(1,715		)	(1,927		)	—
	Deferred financing costs, net of accumulated amortization	—	(6,006		)	(5,541		)	—
	Mortgage notes payable, net	89	$	1,038,894		$	984,876		2.8%

_______________________________


⁽¹⁾	Amounts borrowed in local currency and translated at the spot rate as of the periods presented.


⁽²⁾	Fixed as a result of an interest rate swap agreement.


⁽³⁾	The interest rate is 2.0% plus 1-month LIBOR.


⁽⁴⁾	The interest rate is 2.0% plus 1-month Adjusted LIBOR as defined in the mortgage agreement.

The following table presents future scheduled aggregate principal payments on the Company's gross mortgage notes payable over the next five calendar years and thereafter as of March 31, 2018:



(In thousands)	Future Principal Payments ⁽¹⁾
2018 (remainder)	$	136,944
2019	302,419
2020	342,081
2021	45,421
2022	—
2023	—
Thereafter	219,750
Total	$	1,046,615

_________________________


⁽¹⁾	Assumes exchange rates of £1.00 to $1.40 for GBP and €1.00 to $1.23 for EUR as of March 31, 2018 for illustrative purposes, as applicable.

The Company's mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of March 31, 2018, the Company was in compliance with all financial covenants under its mortgage notes payable agreements.

As of December 31, 2017, the Company was in breach of a loan-to-vacant possession financial covenant on one mortgage note payable agreement, which had an outstanding principal balance of $37.9 million (£28.1 million) as of December 31, 2017. During the fourth quarter of 2017, the Company repaid £0.8 million and in January 2018 the Company repaid €0.1 million of principal on two separate mortgage note payable agreements in order to cure loan to value financial covenant breaches which did not result in events of default. The Company was in compliance with the remaining covenants under its mortgage notes payable agreements as of December 31, 2017.

Multi-Tenant Mortgage Loan II

On January 26, 2018, the Company entered into a multi-tenant mortgage loan, yielding gross proceeds of $32.8 million with a fixed interest rate of 4.32% and a 10-year maturity in February 2028. The multi-tenant mortgage loan is secured by eight properties in six states totaling approximately 627,500 square feet. Proceeds were used to pay down approximately $30.0 million of outstanding indebtedness under the Revolving Credit Facility and for general corporate purposes and future acquisitions.