Notes Payable

3 Months Ended

Mar. 31, 2020

The following table summarizes the terms of notes payable outstanding at March 31, 2020 and December 31, 2019 ($ in thousands):



Description	Interest Rate	Maturity (1)	2020			2019
Unsecured Notes:
Credit Facility, Unsecured	2.04%	2023	$	—		$	251,500
Term Loan, Unsecured	2.19%	2021	250,000			250,000
2019 Senior Notes, Unsecured	3.95%	2029	275,000			275,000
2017 Senior Notes, Unsecured	3.91%	2025	250,000			250,000
2019 Senior Notes, Unsecured	3.86%	2028	250,000			250,000
2019 Senior Notes, Unsecured	3.78%	2027	125,000			125,000
2017 Senior Notes, Unsecured	4.09%	2027	100,000			100,000
			1,250,000			1,501,500
Secured Mortgage Notes:
Fifth Third Center	3.37%	2026	139,522			140,332
Terminus 100	5.25%	2023	117,375			118,146
Colorado Tower	3.45%	2026	116,486			117,085
Promenade	4.27%	2022	95,152			95,986
816 Congress	3.75%	2024	79,554			79,987
Terminus 200	3.79%	2023	75,654			76,079
Legacy Union One	4.24%	2023	66,000			66,000
Meridian Mark Plaza	6.00%	2020	—			22,978
			689,743			716,593
			$	1,939,743		$	2,218,093

Unamortized premium			10,323			11,239
Unamortized loan costs			(6,032		)	(6,357		)
Total Notes Payable			$	1,944,034		$	2,222,975

(1) Weighted average maturity of notes payable outstanding at March 31, 2020 was 5.7 years.

Credit Facility

The Company has a $1 billion senior unsecured line of credit (the "Credit Facility") that matures on January 3, 2023. The Credit Facility contains 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; a secured leverage ratio of no more than 40%; and an overall leverage ratio of no more than 60%. The Credit Facility also contains customary representations and warranties and affirmative and negative covenants, as well as customary events of default. The amounts outstanding under the Credit Facility may be accelerated upon the occurrence of any events of default.

The interest rate applicable to the 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 London Interbank Offering Rate ("LIBOR") plus a spread of between 1.05% and 1.45%, 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% or 0.45%, based on leverage.

At March 31, 2020, the Credit Facility's spread over LIBOR was 1.05%. The amount that the Company may draw under the Credit Facility is a defined calculation based on the Company's unencumbered assets and other factors. The total available borrowing capacity under the Credit Facility was $1.0 billion at March 31, 2020.

Term Loan

The Company has a $250 million unsecured term loan (the "Term Loan") that matures on December 2, 2021. The Term Loan has financial covenants consistent with those of the 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 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 1.00% (the “Base Rate”), plus a spread of between 0.00% and 0.75%, based on leverage. At March 31, 2020, the Term Loan's spread over LIBOR was 1.20%.

Unsecured Senior Notes

The Company has unsecured senior notes of $1.0 billion that were funded in five tranches. The first tranche of $100 million is due in 2027 and has a fixed annual interest rate of 4.09%. The second tranche of $250 million is due in 2025 and has a fixed annual interest rate of 3.91%. The third tranche of $125 million is due in 2027 and has a fixed annual interest rate of 3.78%. The fourth tranche of $250 million is due in 2028 and has a fixed annual interest rate of 3.86%. The fifth tranche of $275 million is due in 2029 and has a fixed annual interest rate of 3.95%.

The unsecured senior 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 a secured leverage ratio of no more than 40%. The senior notes also contain customary representations and warranties and affirmative and negative covenants, as well as customary events of default.

Mortgage Notes

On February 3, 2020, the Company prepaid in full, without penalty, the $23.0 million Meridian Mark Plaza mortgage note.

Other Debt Information

At March 31, 2020 and December 31, 2019, the estimated fair value of the Company’s notes payable were $2.0 billion and $2.3 billion, respectively, calculated by discounting the debt's remaining contractual cash flows at estimated rates at which similar loans could have been obtained at March 31, 2020 and December 31, 2019. 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 as the Company utilizes market rates for similar type loans from third party brokers.

For the three months ended March 31, 2020 and 2019, interest expense was recorded as follows (in thousands):



	2020			2019
Total interest incurred	$	21,213		$	11,835
Interest capitalized	(5,309		)	(1,015		)
Total interest expense	$	15,904		$	10,820