Debt

12 Months Ended

Dec. 31, 2020

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


	Weighted Average Effective Interest Rate at December 31, 2020 (1)		Maturity Date	December 31, 2020		December 31, 2019
Unsecured Credit Facility
Revolving Credit Facility	1.41	%	December 17, 2023	$	392,337	$	317,028
Term Loan A	3.26	%	December 17, 2024	225,000		225,000
Term Loan B	3.30	%	April 27, 2025	225,000		225,000
Term Loan C	3.46	%	October 18, 2026	250,000		250,000
Term Loan D	1.45	%	January 15, 2026	250,000		—
4.750% Senior Notes	4.75	%	November 15, 2025	—		400,000
3.875% Senior Notes	3.88	%	October 1, 2028	500,000		—
Lenexa Mortgage	4.10	%	May 1, 2022	—		1,736
Finance Leases	4.33	%	2021 - 2038	41,718		45,140
	2.85	%		1,884,055		1,463,904
Less net debt issuance costs				(14,562)		(10,839)
Total outstanding debt, net				$	1,869,493	$	1,453,065

(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 December 31, 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 (“Term Loan A”), a $225 million term loan which matures on April 27, 2025 (“Term Loan B”), an additional term loan of $250 million, which matures on October 18, 2026 (“Term Loan C”) and a $1.0 billion revolving credit facility which matures on December 17, 2023. The revolving portion of the unsecured credit facility has a one-year extension option available to the Company, subject to certain conditions. 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 December 31, 2020, we were in compliance with all of our covenants.

As of December 31, 2020, we had outstanding $1.1 billion of indebtedness under the unsecured credit facility, consisting of $392.3 million of outstanding borrowings under the unsecured revolving credit facility and $700.0 million aggregate outstanding under Term Loans A, B and C, exclusive of net debt issuance costs of $7.1 million. In connection with the unsecured credit facility, as of December 31, 2020, we had letters of credit outstanding aggregating to $3.5 million. As of

December 31, 2020, the weighted average interest rate for amounts outstanding under the unsecured credit facility, including the effects of interest rate swaps, was 2.65%.

We have also entered into certain interest rate swap agreements. See Note 10 – ‘Derivative Instruments’ for additional details.

(b) Term Loan D – In October 2020, through our Operating Partnership, we entered into a $250 million term loan (“Term Loan D”) that matures on January 15, 2026. Consistent with our existing term loans, amounts outstanding under Term Loan D 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. The spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. In addition, Term Loan D contains a LIBOR floor of 0.25%. When combined with our current $1.7 billion unsecured credit facility, Term Loan D increases QTS' aggregate unsecured credit facility capacity to $1.95 billion. Term Loan D also provides for a $250 million accordion feature to increase borrowing capacity up to $500 million, subject to obtaining necessary commitments. Term Loan D contains various debt covenants with which we are subject to, and these debt covenants are substantially the same as the debt covenants associated with the unsecured credit facility.

(c) 4.750% Senior Notes – In November 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 previously outstanding 5.875% Senior Notes due 2022 (collectively, the “Issuers”), issued $400 million aggregate principal amount of 4.750% Senior Notes due 2025 (the “4.750% Senior Notes”) in a private offering. The 4.750% Senior Notes had an interest rate of 4.750% per annum, were issued at a price equal to 100% of their face value and were scheduled to mature on November 15, 2025. During the fourth quarter of 2020 we used availability on our unsecured revolving credit facility, which increased due to revolver repayments following the issuance of the 3.875% Senior Notes and closing of Term Loan D, to fund the redemption of, and satisfy and discharge the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes. We incurred expenses in the fourth quarter of 2020 associated with the redemption of the 4.750% Senior Notes of $18.0 million, including early redemption fees of $14.3 million as well as noncash charges of $3.7 million related to the write off of existing deferred financing costs.

(d) 3.875% Senior Notes – In October 2020, the Issuers issued $500 million aggregate principal amount of senior notes due October 1, 2028 (the “3.875% Senior Notes”) in a private offering. The 3.875% Senior Notes have an interest rate of 3.875% per annum and were issued at a price equal to 100% of their face value. The net proceeds from the offering were used to repay a portion of the amount outstanding under our unsecured revolving credit facility, and subsequently with availability under the unsecured revolving credit facility we funded the redemption of, and satisfied and discharged the indenture pursuant to which the Issuers issued, all of their outstanding 4.750% Senior Notes described above. As of December 31, 2020, the net debt issuance costs associated with the 3.875% Senior Notes were $7.5 million.

The Issuers may redeem the 3.875% Senior Notes prior to maturity at their option at the prices set forth in the indenture dated as of October 7, 2020, among QTS, the Issuers, the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee (the “Indenture”). The Indenture also includes customary negative covenants, including limitations on asset sales, investments, distributions, incurrence of additional debt and affiliate transactions.

The 3.875% 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 3.875% Senior Notes. QTS Realty Trust, Inc. does not guarantee the 3.875% Senior Notes and will not be required to guarantee the 3.875% Senior Notes except under certain circumstances.

(e) Lenexa Mortgage – On March 8, 2017, we entered into a $1.9 million mortgage loan secured by our Lenexa facility. This mortgage had a fixed rate of 4.1%, with periodic principal payments due monthly and a balloon payment of $1.6 million scheduled for May 2022. In November of 2020 we paid off the outstanding loan balance of $1.7 million associated with the Lenexa mortgage.

The annual remaining principal payment requirements of our debt securities as of December 31, 2020 per the contractual maturities, excluding extension options and excluding operating and finance leases, are as follows (in thousands):


Year ending December 31,
2021	$	—
2022	—
2023	392,337
2024	225,000
2025	225,000
Thereafter	1,000,000
Total	$	1,842,337

As of December 31, 2020, we were in compliance with all of our covenants.