NOTES PAYABLE

The following table details the terms and amounts of the Company’s outstanding notes payable at March 31, 2018 and December 31, 2017 ($ in thousands):



Description	Interest Rate		Maturity*	March 31, 2018				December 31, 2017
Term Loan, Unsecured	3.08	%	2021	$	250,000			$	250,000
Senior Notes, Unsecured	3.91	%	2025	250,000				250,000
Fifth Third Center	3.37	%	2026	145,801				146,557
Colorado Tower	3.45	%	2026	120,000				120,000
Promenade	4.27	%	2022	101,588				102,355
Senior Notes, Unsecured	4.09	%	2027	100,000				100,000
816 Congress	3.75	%	2024	82,903				83,304
Meridian Mark Plaza	6.00	%	2020	23,912				24,038
The Pointe	4.01	%	2019	22,398				22,510
Credit Facility, Unsecured	2.93	%	2023	—				—
				1,096,602			—	1,098,764
Unamortized premium, net				169				219
Unamortized loan costs				(5,513		)		(5,755		)
Total Notes Payable				$	1,091,258			$	1,093,228

*Weighted average maturity of notes payable outstanding at March 31, 2018 was 6.4 years.

Credit Facility

The Company had a $500 million senior unsecured line of credit (the "Credit Facility") that was scheduled to mature on May 28, 2019. The Credit Facility contained financial covenants that required, among other things, the maintenance of an unencumbered interest coverage ratio of at least 2.00; a fixed charge coverage ratio of at least 1.50; an overall leverage ratio of no more than 60%; and a minimum shareholders' equity balance in an amount equal to $1.0 billion, plus a portion of the net cash proceeds from certain equity issuances. The Credit Facility also contained customary representations and warranties and affirmative and negative covenants, as well as customary events of default.

The interest rate applicable to the Credit Facility varied according to the Company’s leverage ratio, and was, at the election of the Company, determined based on either (1) the current London Interbank Offered Rate ("LIBOR") plus a spread of between 1.10% and 1.45%, based on leverage, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the “Base Rate”), plus a spread of between 0.10% and 0.45%, based on leverage. The Company also paid an annual facility fee on the total commitments under the Credit Facility of between 0.15% and 0.30%, based on leverage.

On January 3, 2018, the Company entered into a Fourth Amended and Restated Credit Agreement (the "New Credit Facility") under which the Company may borrow up to $1 billion if certain conditions are satisfied.

The New Credit Facility recasts the Credit Facility by:


•	Increasing the size from $500 million to $1 billion;


•	Extending the maturity date from May 28, 2019 to January 3, 2023;


•	Reducing certain per annum variable interest rate spreads and other fees;


•	Providing for the expansion of the New Credit Facility by an additional $500 million, subject to receipt of additional commitments from lenders and other customary conditions;


•	Decreasing the minimum spread over LIBOR from 1.10% to 1.05%;


•	Removing the $90 million investment entity cap;


•	Removing the Unsecured Debt Limit and replacing it with an Unsecured Leverage Ratio limit;


•	Removing the Minimum Shareholder's Equity requirement;


•	Decreasing the Consolidated Unencumbered Interest Coverage ratio from 2.0 to 1.75; and


•	Removing the Consolidated Secured Recourse Debt Limitation and replacing it with a Secured Leverage Ratio of 40% or less.

The New Credit Facility did not change the other financial covenants from those of the Credit Facility.

The interest rate applicable to the New Credit Facility varies according to the Company's leverage ratio, and may, at the election of the Company, be determined based on either (1) the current LIBOR plus the applicable spread detailed below, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the "Base Rate"), plus the applicable spread detailed below. Fees on letters of credit issued under the New Credit Facility are payable at an annual rate equal to the spread applicable to loans bearing interest based on LIBOR. The Company also pays an annual facility fee on the total commitments under the New Credit Facility. The pricing spreads and the facility fee under the New Credit Facility are as follows:



Leverage Ratio	Applicable % Spread for LIBOR Loans	Applicable % Spread for Base Rate Loans	Annual Facility Fee %
≤ 35%	1.05%	0.10%	0.15%
> 35% but ≤ 40%	1.10%	0.15%	0.20%
> 40% but ≤ 45%	1.20%	0.20%	0.20%
> 45% but ≤ 50%	1.20%	0.20%	0.25%
> 50%	1.45%	0.45%	0.30%

The New Credit Facility also provides for alternative pricing spreads and facility fees, which would be available to the Company on any date after it obtains an investment grade credit rating.

At March 31, 2018, the New Credit Facility's spread over LIBOR was 1.05%. The amount that the Company had available to be drawn under the New Credit Facility was a defined calculation based on the Company's unencumbered assets and other factors. As of March 31, 2018, the Company had no amounts drawn under the New Credit Facility and had the ability to borrow $997 million of the $1 billion available with $3 million utilized by outstanding letters of credit.

Unsecured Term Loan

The Company has a $250 million unsecured term loan (the "Term Loan") that matures on December 2, 2021. Through January 21, 2018, the Term Loan contained financial covenants substantially consistent with those of the Credit Facility. On January 22, 2018, the Term Loan was amended to make the financial covenants consistent with those of the New Credit Facility. The interest rate applicable to the Term Loan varies according to the Company’s leverage ratio, and may, at the election of the Company, be determined based on either (1) the current London Interbank Offered Rate ("LIBOR") plus a spread of between 1.20% and 1.70%, based on leverage, or (2) the greater of Bank of America's prime rate, the federal funds rate plus 0.50%, or the one-month LIBOR plus 1.0% (the “Base Rate”), plus a spread of between 0.00% and 0.75%, based on leverage. At March 31, 2018, the Term Loan's spread over LIBOR was 1.2%.

Unsecured Senior Notes

In 2017, the Company closed a $350 million private placement of senior unsecured notes, which was funded in two tranches. The first tranche of $100 million has a 10-year maturity and a fixed annual interest rate of 4.09%. The second tranche of $250 million has an 8-year maturity and a fixed annual interest rate of 3.91%.

The senior unsecured notes contain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75; a fixed charge coverage ratio of at least 1.50; an overall leverage ratio of no more than 60%; and secured leverage ratio of 40% or less. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default.

Fair Value

At March 31, 2018 and December 31, 2017, the aggregate estimated fair values of the Company's notes payable were $1.1 billion for each of the periods, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at those respective dates. The estimate of the current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines as set forth in ASC 820, "Fair Value Measurement," as the Company utilizes market rates for similar type loans from third-party brokers.

Other Information

For the three months ended March 31, 2018 and 2017, interest expense was as follows (in thousands):



	Three Months Ended March 31,
	2018			2017
Total interest incurred	$	10,874		$	11,331
Interest capitalized	(1,096		)	(1,590		)
Total interest expense	$	9,778		$	9,741