Senior Notes Payable and Other Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Senior Notes Payable and Other Debt

NOTE 10 – SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt (dollars in thousands):

	As of December 31,
	2021		2020
Unsecured revolving credit facility (1)	$	56,448	$	39,395
Commercial paper notes	280,000		—
Secured revolving construction credit facility due 2022	—		154,098
Floating Rate Senior Notes, Series F due 2021 (2)	—		235,664
3.25% Senior Notes due 2022	—		263,687
3.30% Senior Notes, Series C due 2022 (2)	—		196,386
Unsecured term loan due 2023	200,000		200,000
3.125% Senior Notes due 2023	—		400,000
3.10% Senior Notes due 2023	—		400,000
2.55% Senior Notes, Series D due 2023 (2)	217,667		216,025
3.50% Senior Notes due 2024	400,000		400,000
3.75% Senior Notes due 2024	400,000		400,000
4.125% Senior Notes, Series B due 2024 (2)	197,879		196,386
2.80% Senior Notes, Series E due 2024 (2)	474,909		471,328
Unsecured term loan due 2025 (2)	395,757		392,773
3.50% Senior Notes due 2025	600,000		600,000
2.65% Senior Notes due 2025	450,000		450,000
4.125% Senior Notes due 2026	500,000		500,000
3.25% Senior Notes due 2026	450,000		450,000
2.45% Senior Notes, Series G due 2027 (2)	375,970		—
3.85% Senior Notes due 2027	400,000		400,000
4.00% Senior Notes due 2028	650,000		650,000
4.40% Senior Notes due 2029	750,000		750,000
3.00% Senior Notes due 2030	650,000		650,000
4.75% Senior Notes due 2030	500,000		500,000
2.50% Senior Notes due 2031	500,000		—
3.30% Senior Notes, Series H due 2031 (2)	237,454		—
6.90% Senior Notes due 2037 (3)	52,400		52,400
6.59% Senior Notes due 2038 (3)	22,823		22,823
5.70% Senior Notes due 2043	300,000		300,000
4.375% Senior Notes due 2045	300,000		300,000
4.875% Senior Notes due 2049	300,000		300,000
Mortgage loans and other	2,431,831		2,092,106
Total	12,093,138		11,983,071
Deferred financing costs, net	(69,925)		(68,343)
Unamortized fair value adjustment	32,888		12,618
Unamortized discounts	(28,557)		(31,934)
Senior notes payable and other debt	$	12,027,544	$	11,895,412

(1)As of December 31, 2021 and 2020, respectively, $30.9 million and $12.2 million of aggregate borrowings were denominated in Canadian dollars. Aggregate borrowings of $25.6 million and $27.2 million were denominated in British pounds as of December 31, 2021 and 2020, respectively.

(2)Canadian Dollar debt obligations shown in US Dollars.

(3)Our 6.90% senior notes due 2037 are subject to repurchase at the option of the holders, at par, on October 1, 2027, and our 6.59% senior notes due 2038 are subject to repurchase at the option of the holders, at par, on July 7 in each of 2023 and 2028.

Credit Facilities, Commercial Paper and Unsecured Term Loans

In January 2021, we entered into an amended and restated unsecured credit facility (the “New Credit Facility”) comprised of a $2.75 billion unsecured revolving credit facility initially priced at LIBOR plus 0.825% based on the Company’s debt rating. The New Credit Facility replaced our previous $3.0 billion unsecured revolving credit facility priced at 0.875%. The New Credit Facility matures in January 2025, but may be extended at our option, subject to the satisfaction of certain conditions, for two additional periods of six months each. The New Credit Facility also includes an accordion feature that permits us to increase our aggregate borrowing capacity thereunder to up to $3.75 billion, subject to the satisfaction of certain conditions.

Our unsecured credit facility imposed certain customary restrictions on us, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers and dissolutions; (v) certain dividend, distribution and other payments; (vi) permitted businesses; (vii) transactions with affiliates; (viii) agreements limiting certain liens; and (ix) the maintenance of certain consolidated total leverage, secured debt leverage, unsecured debt leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth, and contains customary events of default.

As of December 31, 2021, we had $2.7 billion of undrawn capacity on our New Credit Facility with $56.4 million borrowings outstanding and an additional $24.9 million restricted to support outstanding letters of credit. We limit our use of the New Credit Facility, to the extent necessary, to support our commercial paper program when commercial paper notes are outstanding. As of December 31, 2021, we had $280.0 million of commercial paper outstanding.

Our wholly owned subsidiary, Ventas Realty, Limited Partnership (“Ventas Realty”), may issue from time to time unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1.0 billion. The notes are sold under customary terms in the U.S. commercial paper note market and are ranked pari passu with all of Ventas Realty’s other unsecured senior indebtedness. The notes are fully and unconditionally guaranteed by Ventas, Inc. As of December 31, 2021, we had $280.0 million borrowings outstanding under our commercial paper program.

As of December 31, 2021, we had a $200.0 million unsecured term loan priced at LIBOR plus 0.90% that matures in 2023. The term loan also includes an accordion feature that effectively permits us to increase our aggregate borrowings thereunder to up to $800.0 million.        

As of December 31, 2021, we had a C$500 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.

During the year ended December 31, 2021, we terminated the $400.0 million secured revolving construction credit facility, resulting in a loss on extinguishment of debt of $0.5 million.

Senior Notes

As of December 31, 2021, we had outstanding $7.2 billion aggregate principal amount of senior notes issued by Ventas Realty, approximately $75.2 million aggregate principal amount of senior notes issued by Nationwide Health Properties, Inc. (“NHP”) and assumed by our subsidiary, Nationwide Health Properties, LLC (“NHP LLC”), as successor to NHP, in connection with our acquisition of NHP, and C$1.9 billion aggregate principal amount of senior notes issued by our subsidiary, Ventas Canada Finance Limited (“Ventas Canada”). All of the senior notes issued by Ventas Realty and Ventas Canada are unconditionally guaranteed by Ventas, Inc.

Ventas Realty’s senior notes are part of our and Ventas Realty’s general unsecured obligations, ranking equal in right of payment with all of our and Ventas Realty’s existing and future senior obligations and ranking senior in right of payment to all of our and Ventas Realty’s existing and future subordinated indebtedness. However, Ventas Realty’s senior notes are effectively subordinated to our and Ventas Realty’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Realty’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Realty and, with respect to those senior notes co-issued by Ventas Capital Corporation, Ventas Capital Corporation).

Ventas Canada’s senior notes are part of our and Ventas Canada’s general unsecured obligations, ranking equal in right of payment with all of Ventas Canada’s existing and future subordinated indebtedness. However, Ventas Canada’s senior notes are effectively subordinated to our and Ventas Canada’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. Ventas Canada’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of our subsidiaries (other than Ventas Canada).

NHP LLC’s senior notes are part of NHP LLC’s general unsecured obligations, ranking equal in right of payment with all of NHP LLC’s existing and future senior obligations and ranking senior to all of NHP LLC’s existing and future subordinated indebtedness. However, NHP LLC’s senior notes are effectively subordinated to NHP LLC’s secured indebtedness, if any, to the extent of the value of the assets securing that indebtedness. NHP LLC’s senior notes are also structurally subordinated to the preferred equity and indebtedness, whether secured or unsecured, of its subsidiaries.

Ventas Realty and Ventas Canada may redeem each series of their respective senior notes in whole at any time or in part from time to time, prior to maturity at the redemption prices set forth in the applicable indenture (which include, in many instances, a make-whole premium), plus, in each case, accrued and unpaid interest thereon to the redemption date.

NHP LLC’s 6.90% senior notes due 2037 are subject to repurchase at the option of the holders, at par, on October 1, 2027, and its 6.59% senior notes due 2038 are subject to repurchase at the option of the holders, at par, on July 7 in each of 2023 and 2028.

2021 Senior Notes Activity

In December 2021, Ventas Canada issued and sold C$475.0 million aggregate principal amount of 2.45% senior notes, Series G and C$300.0 million aggregate principal amount of 3.30% senior notes, Series H, due 2027 and 2031 at 99.79% and 99.65% of par, respectively.

In November 2021, Ventas Canada issued a make whole notice of redemption for the entirety of the C$250.0 million aggregate principal amount of 3.30% senior notes due 2022, resulting in a loss on extinguishment of debt of $0.8 million during the year ended December 31, 2021. The redemption settled in December 2021, principally using cash on hand.

In November 2021, Ventas Canada repaid in full, at par, our variable rate C$300.0 million principal amount then outstanding senior notes due 2021 upon maturity.

In August 2021, Ventas Realty issued and sold $500.0 million aggregate principal amount of 2.50% senior notes due 2031 at 99.74% of par.

In August 2021, Ventas Realty issued a make whole notice of redemption for the entirety of the $400.0 million aggregate principal amount of 3.125% senior notes due 2023, resulting in a loss on extinguishment of debt of $20.9 million during the year ended December 31, 2021. The redemption settled in September 2021, principally using cash on hand.

In July 2021, Ventas Realty and Ventas Capital Corporation issued a make whole notice of redemption for the entirety of the $263.7 million aggregate principal amount of 3.25% senior notes due 2022, resulting in a loss on extinguishment of debt of $8.2 million during the year ended December 31, 2021. The redemption settled in August 2021, principally using cash on hand.

In February 2021, Ventas Realty issued a make whole notice of redemption for the entirety of the $400.0 million aggregate principal amount of 3.10% senior notes due January 2023, resulting in a loss on extinguishment of debt of $27.3 million during the year ended December 31, 2021. The redemption settled in March 2021, principally using cash on hand.

2020 Senior Notes Activity

In April 2020, Ventas Realty issued and sold $500.0 million aggregate principal amount of 4.75% senior notes due 2030 at an amount equal to 97.86% of par.

In October 2020, we redeemed, pursuant to a cash tender offer, $236.3 million aggregate principal amount then outstanding of our 3.25% senior notes due 2022 at 104.14% of par value, plus accrued and unpaid interest to the payment date. As a result, we recognized a loss on extinguishment of debt of $11.1 million during the year ended December 31, 2020.

Mortgages

At December 31, 2021, we had 112 mortgage loans outstanding in the aggregate principal amount of $2.4 billion, which is secured by 102 of our properties. Of these loans, 95 loans in the aggregate principal amount of $2.1 billion bear interest at fixed rates ranging from 1.99% to 13.01% per annum, and 17 loans in the aggregate principal amount of $370.0 million bear interest at variable rates ranging from 0.08% to 2.85% per annum as of December 31, 2021. At December 31, 2021, the weighted average annual rate on our fixed rate mortgage loans was 3.6%, and the weighted average annual rate on our variable rate mortgage loans was 1.7%. Our mortgage loans had a weighted average maturity of 4.2 years as of December 31, 2021.

During the years ended December 31, 2021 and 2020, we repaid in full mortgage loans in the aggregate principal amount of $284.7 million and $60.9 million, respectively.

In September 2021, we assumed $482.5 million in mortgage debt maturing in 2025 in connection with the New Senior Acquisition including a $25.4 million fair value premium, which is amortized over the remaining term through interest expense in our Consolidated Statement of Income. See “Note 4 – Acquisitions of Real Estate Property”.

Scheduled Maturities of Borrowing Arrangements and Other Provisions

The following summarizes the maturities of our senior notes payable and other debt as of December 31, 2021 (dollars in thousands):

	Principal Amount Due at Maturity		Unsecured Revolving Credit Facility and Commercial Paper Notes (1)		Scheduled Periodic Amortization		Total Maturities
2022	$	389,966	$	280,000	$	51,887	$	721,853
2023	696,075		—		38,757		734,832
2024	1,651,162		—		32,974		1,684,136
2025	2,047,551		56,448		26,810		2,130,809
2026	1,035,585		—		19,869		1,055,454
Thereafter	5,656,800		—		109,254		5,766,054
Total maturities	$	11,477,139	$	336,448	$	279,551	$	12,093,138

(1)At December 31, 2021, we had $186.7 million of borrowings outstanding under our unsecured revolving credit facility and commercial paper program, net of $149.7 million of unrestricted cash and cash equivalents.

The instruments governing our outstanding indebtedness contain covenants that limit our ability and the ability of certain of our subsidiaries to, among other things: (i) incur debt; (ii) make certain dividends, distributions and investments; (iii) enter into certain transactions; and/or (iv) merge, consolidate or sell certain assets. Ventas Realty’s and Ventas Canada’s senior notes also require us and our subsidiaries to maintain total unencumbered assets of at least 150% of our unsecured debt. Our credit facilities also require us to maintain certain financial covenants pertaining to, among other things, our consolidated total leverage, secured debt, unsecured debt, fixed charge coverage and net worth.

As of December 31, 2021, we were in compliance with all of these covenants.

Derivatives and Hedging

In the normal course of our business, interest rate fluctuations affect future cash flows under our variable rate debt obligations, loans receivable and marketable debt securities, and foreign currency exchange rate fluctuations affect our operating results. We follow established risk management policies and procedures, including the use of derivative instruments, to mitigate the impact of these risks.

We do not use derivative instruments for trading or speculative purposes, and we have a policy of entering into contracts only with major financial institutions based upon their credit ratings and other factors. When considered together with the underlying exposure that the derivative is designed to hedge, we do not expect that the use of derivatives in this manner would have any material adverse effect on our future financial condition or results of operations.

As of December 31, 2021, our variable rate debt obligations of $1.1 billion reflect, in part, the effect of $145.6 million notional amount of interest rate swaps with maturities ranging from March 2022 to May 2022 that effectively convert fixed rate debt to variable rate debt. As of December 31, 2021, our fixed rate debt obligations of $11.0 billion reflect, in part, the effect of $303.1 million and C$274.0 million notional amount of interest rate swaps with maturities ranging from January 2023 to April 2031, in each case that effectively convert variable rate debt to fixed rate debt.