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SENIOR NOTES PAYABLE AND OTHER DEBT
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
SENIOR NOTES PAYABLE AND OTHER DEBT
NOTE 9—SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt (dollars in thousands):
As of June 30, 2023As of December 31, 2022
Unsecured revolving credit facility (1)(2)
$35,019 $25,230 
Commercial paper notes135,000 403,000 
2.55% Senior Notes, Series D due 2023 (2)
— 202,967 
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)
123,339 184,515 
2.80% Senior Notes, Series E due 2024 (2)
55,181 442,837 
Unsecured term loan due 2025 (2)
377,758 369,031 
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 
3.75% Exchangeable Senior Notes due 2026
862,500 — 
Unsecured term loan due 2027500,000 500,000 
2.45% Senior Notes, Series G due 2027 (2)
358,870 350,579 
3.85% Senior Notes due 2027
400,000 400,000 
4.00% Senior Notes due 2028
650,000 650,000 
5.398% Senior Notes, Series I due 2028 (2)
453,309 — 
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
500,000 500,000 
3.30% Senior Notes, Series H due 2031 (2)
226,655 221,419 
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 other3,086,088 2,436,443 
Total13,438,942 12,361,244 
Deferred financing costs, net(81,363)(63,410)
Unamortized fair value adjustment19,510 23,535 
Unamortized discounts(22,349)(24,589)
Senior notes payable and other debt$13,354,740 $12,296,780 
______________________________
(1)As of June 30, 2023 and December 31, 2022, respectively, $12.8 million and $3.7 million of aggregate borrowings were denominated in Canadian dollars. Aggregate borrowings of $22.2 million and $21.5 million were denominated in British pounds as of June 30, 2023 and December 31, 2022, respectively.
(2)British Pound and 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, Unsecured Term Loans and Letters of Credit

We have a $2.75 billion unsecured revolving credit facility priced at SOFR plus 0.925%, which is subject to adjustment based on the Company’s debt rating. The unsecured revolving 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 unsecured revolving 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, including the receipt of additional commitments for such increase.

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 June 30, 2023, we had $2.7 billion of undrawn capacity on our unsecured revolving credit facility with $35.0 million outstanding and an additional $1.2 million restricted to support outstanding letters of credit. We limit our use of the unsecured revolving credit facility, to the extent necessary, to support our commercial paper program when commercial paper notes are outstanding.

As of June 30, 2023, our $100.0 million uncommitted line for standby letters of credit had an outstanding balance of $14.7 million. The agreement governing the line contains certain customary covenants and, under its terms, we are required to pay a commission on each outstanding letter of credit at a fixed rate.

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 June 30, 2023, we had $135.0 million in borrowings outstanding under our commercial paper program.

As of June 30, 2023, we had a C$500.0 million unsecured term loan facility priced at Canadian Dollar Offered Rate (“CDOR”) plus 0.90% that matures in 2025.

Exchangeable Senior Notes

In June 2023, Ventas Realty issued $862.5 million aggregate principal amount of its 3.75% Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”) in a private placement. The Exchangeable Notes are senior, unsecured obligations of Ventas Realty and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Ventas. The Exchangeable Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2023. The Exchangeable Notes mature on June 1, 2026, unless earlier exchanged, redeemed or repurchased. The net proceeds from the Exchangeable Notes were primarily used to repay the CHC Mortgage Loan. As of June 30, 2023, we had $862.5 million aggregate principal amount of the Exchangeable Notes outstanding.

The Exchangeable Notes are exchangeable at an initial exchange rate of 18.2460 shares of our common stock per $1,000 principal amount of Exchangeable Notes (equivalent to an initial exchange price of approximately $54.81 per share of common stock). The initial exchange rate is subject to adjustment, including in the event of the payment of a quarterly dividend in excess of $0.45 per share, but will not be adjusted for any accrued and unpaid interest. Upon exchange of the Exchangeable Notes, Ventas Realty will pay cash up to the aggregate principal amount of the Exchangeable Notes to be exchanged and pay or deliver (or cause to be delivered), as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at Ventas Realty’s election, in respect of the remainder, if any, of its exchange obligation in excess of the aggregate principal amount of the Exchangeable Notes being exchanged. Prior to the close of business on the business day immediately preceding March 1, 2026, the Exchangeable Notes will be exchangeable at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods described in the indenture governing the Exchangeable Notes. On or after March 1, 2026, until the close of business on the business day immediately preceding the maturity date, the Exchangeable Notes will be exchangeable at the option of the noteholders at any time regardless of these conditions or periods.
We have evaluated and concluded that the exchange options embedded in our exchangeable senior notes are eligible for the entity’s own equity scope exception from ASC 815 and therefore, do not need to be bifurcated. Accordingly, we record our exchangeable senior notes as liabilities (included in senior notes payable and other debt on our Consolidated Balance Sheets).

Senior Notes

In April 2023, our 100% owned subsidiary, Ventas Canada Finance Limited (“Ventas Canada”), issued and sold C$600.0 million aggregate principal amount of 5.398% Senior Notes due 2028 in a private placement at par. Pursuant to cash tender offers, we used the proceeds to repurchase C$613.7 million in aggregate principal amount of outstanding senior notes due in 2024 for an aggregate purchase price of C$600.0 million plus accrued and unpaid interest as disclosed below:

•In April 2023, we repurchased C$527.0 million principal amount of our 2.80% Senior Notes, Series E due April 2024 at 97.6% of par value, plus accrued and unpaid interest to, but not including, the settlement date.

•In April 2023, we repurchased C$86.7 million principal amount of our 4.125% Senior Notes, Series B due September 2024 at 98.5% of par value, plus accrued and unpaid interest to, but not including, the settlement date.

As a result of the tender offers, we recognized a gain on extinguishment of debt of $8.3 million in our Consolidated Statements of Income for both the three and six months ended June 30, 2023.

Mortgages

In March 2023, we entered into a C$271.8 million floating rate mortgage loan maturing in 2028 with an interest rate of CDOR + 0.88%. The mortgage is secured by 14 SHOP communities in Canada.

On May 1, 2023, we took ownership of the properties that supported the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. The properties consisted of a diverse pool of 153 assets, which, at the time, also secured the CHC Mortgage Loan. At the time of the equitization of the Santerre Mezzanine Loan, there was $1 billion outstanding under the CHC Mortgage Loan and it accrued interest at a weighted average rate of LIBOR + 1.84% and had matured on June 9, 2023. The CHC Mortgage Loan was recorded at fair value, which approximates par, on May 1, 2023.

On June 8, 2023, we voluntary prepaid, without penalty, $656.6 million of the CHC Mortgage Loan. In connection with the prepayment, 83 properties were released from the collateral securing the CHC Mortgage Loan. As of June 30, 2023, $360.2 million remained outstanding under the CHC Mortgage Loan, which was secured by 70 outpatient medical buildings, triple-net leased skilled nursing facilities and hospital assets in the United States.

On June 9, 2023, we extended the maturity date of the CHC Mortgage Loan to June 9, 2024 and amended the CHC Mortgage Loan to replace its LIBOR-based rates with SOFR-based rates. As of June 30, 2023, the CHC Mortgage Loan had a weighted average rate of SOFR + 2.69%.

In July 2023, we provided notice that we intend to repay the full balance of the CHC Mortgage Loan in August 2023.

In July 2023, we entered into a $426.8 million fixed rate mortgage loan, which accrues interest at 5.91%, matures in 2033 and is secured by 19 SHOP communities in the United States.
As of June 30, 2023, our indebtedness had the following maturities (dollars in thousands):
Principal Amount
Due at Maturity
Unsecured
Revolving Credit
Facility and Commercial Paper Notes (1)(2)
Scheduled Periodic
Amortization		Total Maturities
2023$105,539 $— $27,090 $132,629 
20241,630,168 — 50,170 1,680,338 
20252,026,619 170,019 44,973 2,241,611 
20261,912,832 — 38,787 1,951,619 
20271,341,775 — 38,550 1,380,325 
Thereafter5,897,892 — 154,528 6,052,420 
Total maturities$12,914,825 $170,019 $354,098 $13,438,942 
______________________________
(1)At June 30, 2023, we had $31.4 million of aggregate borrowings outstanding under our unsecured revolving credit facility and commercial paper program, net of $138.6 million of unrestricted cash and cash equivalents.
(2)    Commercial paper program borrowings are backstopped by the revolving credit facility. As such, our commercial paper program balances are presented at the maturity date of the revolving credit facility.

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 June 30, 2023, our variable rate debt obligations of $1.4 billion reflect, in part, the effect of $143.8 million notional amount of interest rate swaps with maturities in March 2027, that effectively convert fixed rate debt to variable rate debt.

As of June 30, 2023, our fixed rate debt obligations of $12.0 billion reflect, in part, the effect of $537.5 million and C$564.6 million notional amount of interest rate swaps with maturities ranging from October 2023 to April 2031, in each case, that effectively convert variable rate debt to fixed rate debt.

2023 Activity

In the first quarter of 2023, we hedged an incremental $200.0 million of variable rate debt to fixed rate debt through the execution in March 2023 of two-year $400.0 million notional swaps on our unsecured term loan due in 2027, replacing a $200.0 million notional swap that matured in January 2023. The swap instruments are designated as cash flow hedges.

In March 2023, in connection with our new C$271.8 million mortgage loan, we entered into an interest rate swap totaling a notional amount of C$271.8 million with a maturity of March 14, 2028 that effectively converts CDOR-based floating rate debt to fixed rate debt.

In March and April 2023, we entered into a total of $250.0 million aggregate forward starting swaps with a ten-year weighted average rate of 3.37%:

•In March 2023, we entered into a total of $200.0 million of notional forward starting swaps that reduced our exposure to fluctuations in interest rates related to changes in rates between the trade dates of the swaps and the forecasted issuance of long-term debt. The rate on the notional amounts was locked at a ten-year weighted average rate of 3.41%. The forward-starting interest rate swap instruments are designated as cash flow hedges.
•In April 2023, we entered into a total of $50.0 million of notional forward starting swaps that reduced our exposure to fluctuations in interest rates related to changes in rates between the trade dates of the swap and the forecasted issuance of long-term debt. The rate on the notional amounts was locked at a ten-year weighted average rate of 3.17%. The forward-starting interest rate swap instruments are designated as cash flow hedges.

•In July 2023, we terminated the above-mentioned forward starting swaps in conjunction with the issuance of the $426.8 million fixed rate mortgage loan due in 2033.
On May 1, 2023, in connection with taking ownership of the properties securing the Santerre Mezzanine Loan, which was collateral for the CHC Mortgage Loan, we also took ownership of existing interest rate caps based on LIBOR with an aggregate notional amount of $1.5 billion that expired in June 2023. On June 5, 2023, in connection with the extension of the maturity date of the CHC Mortgage Loan, we purchased interest rate caps with a total notional value of $360.2 million that expire in June 2024. The objective of the interest rate caps is to offset the variability of cash flows in the CHC Mortgage Loan interest payments attributable to fluctuations in SOFR beyond 9.42%.