Debt

9 Months Ended

Sep. 30, 2020

Below is a listing of our outstanding debt, including finance leases, as of September 30, 2020 and December 31, 2019 (in thousands):


	Weighted Average Effective Interest Rate at September 30, 2020	Maturity Date	September 30, 2020		December 31, 2019
	(unaudited)		(unaudited)
Unsecured Credit Facility
Revolving Credit Facility	1.38%	December 17, 2023	$	522,951	$	317,028
Term Loan A (1)	3.26%	December 17, 2024	225,000		225,000
Term Loan B (1)	3.30%	April 27, 2025	225,000		225,000
Term Loan C (1)	3.46%	October 18, 2026	250,000		250,000
Senior Notes	4.75%	November 15, 2025	400,000		400,000
Lenexa Mortgage	4.10%	May 1, 2022	1,689		1,736
Finance Leases	4.36%	2021 - 2038	43,222		45,140
	3.09%		1,667,862		1,463,904
Less net debt issuance costs			(9,474)		(10,839)
Total outstanding debt, net			$	1,658,388	$	1,453,065

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(1)The coupon interest rates associated with Term Loan A, Term Loan B, and Term Loan C incorporate the effects of our interest rate swaps in effect as of September 30, 2020.

Credit Facilities, Senior Notes and Mortgage Notes Payable

(a) Unsecured Credit Facility – In October 2019, we amended and restated our unsecured credit facility (the “unsecured credit facility”), which among other things increased the total potential borrowings, extended maturity dates, lowered interest rates, and provided for an additional term loan under the agreement. The unsecured credit facility includes a $225 million term loan which matures on December 17, 2024 (the “Term Loan A”), a $225 million term loan which matures on April 27, 2025 (the “Term Loan B”), an additional term loan of $250 million, maturing on October 18, 2026 (the “Term Loan C”), and a $1.0 billion revolving credit facility which matures on December 17, 2023. The revolving portion of the unsecured facility has a one-year extension option. Amounts outstanding under the unsecured credit facility bear interest at a variable rate equal to, at our election, LIBOR or a base rate, plus a spread that will vary depending upon our leverage ratio. For revolving credit loans, the spread ranges from 1.25% to 1.85% for LIBOR loans and 0.25% to 0.85% for base rate loans. For Term Loan A and Term Loan B, the spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. For Term Loan C, the spread ranges from 1.50% to 1.85% for LIBOR loans and 0.50% to 0.85% for base rate loans. The unsecured credit facility also provides for borrowing capacity of up to $300 million in various foreign currencies.

Under the unsecured credit facility, the capacity may be increased from the current capacity of $1.7 billion to $2.2 billion subject to certain conditions set forth in the credit agreement, including the consent of the administrative agent and obtaining necessary commitments. We are also required to pay a commitment fee to the lenders assessed on the unused portion of the unsecured revolving credit facility. At our election, we can prepay amounts outstanding under the unsecured credit facility, in whole or in part, without penalty or premium.

Our ability to borrow under the unsecured credit facility is subject to ongoing compliance with a number of customary affirmative and negative covenants. As of September 30, 2020, we were in compliance with all of our covenants.

As of September 30, 2020, we had outstanding $1,223.0 million of indebtedness under the unsecured credit facility, consisting of $523.0 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million outstanding under the term loans, exclusive of net debt issuance costs of $5.6 million. In connection with the unsecured credit facility, as of September 30, 2020, we had additional letters of credit outstanding aggregating to $3.5 million.

We have also entered into certain interest rate swap agreements. See Note 7 – ‘Derivative Instruments’ for additional details.

(b) Senior Notes – On November 8, 2017, the Operating Partnership and QTS Finance Corporation, a subsidiary of the Operating Partnership formed solely for the purpose of facilitating the offering of the 5.875% Senior Notes due 2022 (collectively, the “Issuers”), issued $400.0 million aggregate principal amount of 4.750% Senior Notes due November 15, 2025 (the “Senior Notes”) in a private offering. The Senior Notes have an interest rate of 4.750% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to fund the redemption of the outstanding 5.875% Senior Notes and to repay a portion of the amount outstanding under our unsecured revolving credit facility. As of September 30, 2020, the outstanding net debt issuance costs associated with the Senior Notes were $3.9 million.

The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of the Operating Partnership’s existing subsidiaries (other than certain foreign subsidiaries and receivables entities) and future subsidiaries that guarantee any indebtedness of QTS Realty Trust, Inc., the Issuers or any other subsidiary guarantor, other than QTS Finance Corporation, the co-issuer of the Senior Notes. QTS Realty Trust, Inc. does not guarantee the Senior Notes and will not be required to guarantee the Senior Notes except under certain circumstances. The offering was conducted pursuant to Rule 144A of the Securities Act of 1933, as amended, and the Senior Notes were issued pursuant to an indenture, dated as of November 8, 2017, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee.

(c) Lenexa Mortgage – On March 8, 2017, we entered into a $1.9 million mortgage loan secured by our Lenexa facility. This mortgage has a fixed rate of 4.1%, with periodic principal payments due monthly and a balloon payment of $1.6 million in May 2022. As of September 30, 2020, the outstanding balance under the Lenexa mortgage was $1.7 million.

The annual remaining principal payment requirements of our debt securities as of September 30, 2020 per the contractual maturities, excluding extension options and excluding operating and finance leases, are as follows (unaudited and in thousands):


2020 (October - December)	$	18
2021	73
2022	1,599
2023	522,951
2024	225,000
Thereafter	875,000
Total	$	1,624,641

As of September 30, 2020, we were in compliance with all of our covenants.