Credit Facility (Credit Facility)

3 Months Ended

Mar. 31, 2014

Credit Facility

Debt instrument

Credit Facility

5.         Credit Facility

We have a $1.5 billion unsecured acquisition credit facility with an initial term that expires in May 2016 and includes, at our election, a one-year extension option. Under this credit facility, our current investment grade credit ratings provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 1.075% with a facility commitment fee of 0.175%, for all-in drawn pricing of 1.25% over LIBOR. The borrowing rate is not subject to an interest rate floor or ceiling. We also have other interest rate options available to us under this credit facility. Our credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation.

At March 31, 2014, credit facility origination costs of $6.4 million are included in other assets, net, on our consolidated balance sheet.  These costs are being amortized over the remaining term of our current $1.5 billion credit facility.

At March 31, 2014, we had a borrowing capacity of $759.9 million available on our credit facility (subject to customary conditions to borrowing) and an outstanding balance of $740.1 million, as compared to an outstanding balance of $128.0 million at December 31, 2013.  As of April 3, 2014, approximately $1.29 billion was available on the credit facility, after using stock offering proceeds (see note 21) to pay down the credit facility.

The weighted average interest rate on outstanding borrowings under our credit facility was 1.2% during the first three months of 2014 and 1.3% during the first three months of 2013. At March 31, 2014, the effective interest rate was 1.2%.  Our current and prior credit facilities are and were subject to various leverage and interest coverage ratio limitations. At March 31, 2014, we remain in compliance with these covenants.