Debt

12 Months Ended

Dec. 31, 2019

Mortgages Payable

The following is a summary of mortgages payable:



	Weighted Average Effective Interest Rate ⁽¹⁾	December 31,
	Weighted Average Effective Interest Rate ⁽¹⁾	2019			2018
		(In thousands)
Variable rate ⁽²⁾	3.36%	$	2,200		$	308,918
Fixed rate ⁽³⁾	4.29%	1,125,648			1,535,734
Mortgages payable		1,127,848			1,844,652
Unamortized deferred financing costs and premium/ discount, net		(2,071		)	(6,271		)
Mortgages payable, net		$	1,125,777		$	1,838,381

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⁽¹⁾	Weighted average effective interest rate as of December 31, 2019.


⁽²⁾	Includes a variable rate mortgage payable with an interest rate cap agreement as of December 31, 2018.


⁽³⁾	Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements.

As of December 31, 2019 and 2018, the net carrying value of real estate collateralizing our mortgages payable, excluding assets held for sale, totaled $1.4 billion and $2.3 billion. Our mortgages payable contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. Certain of our mortgages payable are recourse to us. See Note 19 for additional information. As of December 31, 2019, we were not in default under any mortgage loan.

During the year ended December 31, 2019, aggregate borrowings under mortgages payable totaled $2.2 million related to construction draws. During the year ended December 31, 2019, we repaid mortgages payable with an aggregate principal balance of $709.1 million. The loss on the extinguishment of debt was $5.8 million for the year ended December 31, 2019, of which $2.9 million related to our repayment of various mortgages payable and $2.9 million related to the termination of various interest rate swaps in connection with the repayment of the loan encumbering Central Place Tower. In February 2020, we entered into a mortgage loan with a principal balance of $175.0 million collateralized by 4747 and 4749 Bethesda Avenue.

During the year ended December 31, 2018, aggregate borrowings totaled $118.1 million, of which $47.5 million related to the principal balance on a new mortgage payable collateralized by 1730 M Street and the remainder related to construction draws under mortgages payable. During the year ended December 31, 2018, we repaid mortgages payable with an aggregate principal balance of $298.1 million, which resulted in a loss on the extinguishment of debt of $5.2 million.

As of December 31, 2019 and 2018, we had various interest rate swap and cap agreements on certain of our mortgages payable with an aggregate notional value of $867.6 million and $1.3 billion. During the year ended December 31, 2019, in connection with the repayment of the loan encumbering Central Place Tower, we terminated various interest rate swaps with an aggregate notional value of $220.0 million. During the year ended December 31, 2018, we entered into various interest rate swap and cap agreements on certain of our mortgages payable with an aggregate notional value of $381.3 million. See Note 17 for additional information.

Credit Facility

As of December 31, 2019, our $1.4 billion credit facility consisted of a $1.0 billion revolving credit facility maturing in July 2021, with two six-month extension options, a delayed draw $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023, and a delayed draw $200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. Effective as of July 17, 2019, the credit facility was amended to extend the delayed draw period of our Tranche A-1 Term Loan to July 2020. In December 2019, we drew $200.0 million under the revolving credit facility, which was repaid in 2020.

Based on the terms as of December 31, 2019, the interest rate for the credit facility varies based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets and ranges (a) in the case of the revolving credit facility, from LIBOR plus 1.10% to LIBOR plus 1.50%, (b) in the case of the Tranche A-1 Term Loan, from LIBOR plus 1.20% to LIBOR plus 1.70% and (c) in the case of the Tranche A-2 Term Loan, effective as of July 17, 2019, from LIBOR plus 1.15% to LIBOR plus 1.70%, reflecting a 40 basis points reduction from the prior credit facility. There are various LIBOR options in the credit facility, and we elected the one-month LIBOR option as of December 31, 2019. We were not in default under our credit facility as of December 31, 2019. In January 2020, the credit facility was amended to extend the maturity date of the revolving credit facility from July 2021 to January 2025, and to reduce its range of interest rates by five basis points to LIBOR plus 1.05% to 1.50%.

As of December 31, 2019 and 2018, we had interest rate swaps with an aggregate notional value of $100.0 million, which mature in January 2023 and effectively convert the variable interest rate applicable to our Tranche A-1 Term Loan to a fixed interest rate, providing weighted average base interest rates under the facility agreements of 2.12% per annum for both periods. As of December 31, 2019, we had interest rate swaps with an aggregate notional value of $137.6 million, which effectively convert the variable interest rate applicable to a portion of the outstanding balance of our Tranche A-2 Term Loan to a fixed interest rate, providing a weighted average base interest rate under the facility agreements of 2.59% per annum.

The following is a summary of amounts outstanding under the credit facility:



	Effective	December 31,
	Interest Rate ⁽¹⁾	2019			2018
		(In thousands)
Revolving credit facility ^{(2) (3) (4)}	2.86%	$	200,000		$	—

Tranche A-1 Term Loan ⁽⁵⁾	3.32%	$	100,000		$	100,000
Tranche A-2 Term Loan ⁽⁵⁾	3.74%	200,000			200,000
Unsecured term loans		300,000			300,000
Unamortized deferred financing costs, net		(2,705		)	(2,871		)
Unsecured term loans, net		$	297,295		$	297,129

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⁽¹⁾	Interest rate as of December 31, 2019.


⁽²⁾	As of December 31, 2019 and 2018, letters of credit with an aggregate face amount of $1.5 million and $5.7 million were provided under our revolving credit facility.


⁽³⁾	As of December 31, 2019 and 2018, net deferred financing costs related to our revolving credit facility totaling $3.1 million and $4.8 million were included in "Other assets, net."


⁽⁴⁾	The interest rate for the revolving credit facility excludes a 0.15% facility fee. In January 2020, the credit facility was amended to extend the maturity date of the revolving credit facility from July 2021 to January 2025, and to reduce its range of interest rates by five basis points to LIBOR plus 1.05% to 1.50%.


⁽⁵⁾	The interest rate includes the impact of interest rate swap agreements.