Senior Notes Payable and Other Debt

9 Months Ended

Sep. 30, 2011

Senior Notes Payable and Other Debt [Abstract]

NOTE 8 — SENIOR NOTES PAYABLE AND OTHER DEBT

The following is a summary of our senior notes payable and other debt as of September 30, 2011 and December 31, 2010:


	September 30,			December 31,
	2011			2010
	(In thousands)
Unsecured revolving credit facilities	$	474,000		$	40,000
3⁷/₈% Convertible Senior Notes due 2011		230,000			230,000
9% Senior Notes due 2012		82,433			82,433
8¹/4% Senior Notes due 2012		72,950			—
Unsecured term loan due 2012		250,000			—
Unsecured term loan due 2013		200,000			200,000
6.25% Senior Notes due 2013		269,850			—
3.125% Senior Notes due 2015		400,000			400,000
6% Senior Notes due 2015		234,420			—
6¹/2% Senior Notes due 2016		200,000			400,000
6³/4% Senior Notes due 2017		225,000			225,000
4.750% Senior Notes due 2021		700,000			—
6.90% Senior Notes due 2037		52,400			—
6.59% Senior Notes due 2038		22,973			—
Mortgage loans and other		2,651,830			1,349,521

Total		6,065,856			2,926,954
Capital lease obligations		143,119			—
Unamortized fair value adjustment		145,647			11,790
Unamortized commission fees and discounts		(41,481	)		(38,700	)


Senior notes payable and other debt	$	6,313,141		$	2,900,044

As of September 30, 2011, our joint venture partners’ share of total debt was $45.9 million with respect to seven properties owned through consolidated joint ventures. As of December 31, 2010, our joint venture partners’ share of total debt was $4.8 million with respect to three properties owned through consolidated joint ventures. Total debt does not include our portion of debt related to our investments in unconsolidated entities, which was $131.7 million and $45.9 million at September 30, 2011 and December 31, 2010, respectively.

As of September 30, 2011, our indebtedness (excluding capital lease obligations) had the following maturities:


			Unsecured
	Principal Amount		Revolving Credit		Scheduled Periodic
	Due at Maturity		Facilities (1)		Amortization		Total Maturities
	(In thousands)

2011	$	230,700	$	—	$	12,798	$	243,498
2012 (2)		517,913		474,000		50,347		1,042,260
2013		872,623		—		44,110		916,733
2014		220,891		—		39,998		260,889
2015		835,792		—		32,503		868,295
Thereafter (3)		2,539,451		—		194,730		2,734,181

Total maturities	$	5,217,370	$	474,000	$	374,486	$	6,065,856


(1)		At September 30, 2011, we had $57.5 million of unrestricted cash and cash equivalents, for $416.5 million of net borrowings outstanding under our unsecured revolving credit facilities. On October 18, 2011, we repaid all borrowings outstanding and terminated the commitments under our unsecured revolving credit facilities and entered into a new $2.0 billion unsecured revolving credit facility due 2015, subject to a one-year extension. See “Unsecured Revolving Credit Facilities and Term Loans” below.

(2)		Includes $250.0 million of borrowings outstanding under an $800.0 million senior unsecured term loan previously extended to NHP, which was repaid in full subsequent to September 30, 2011. See “Unsecured Revolving Credit Facilities and Term Loans” below.

(3)		Includes $52.4 million aggregate principal amount of 6.90% Senior Notes due 2037 of NHP, which are subject to repurchase, at the option of the holders, on October 1 of each of 2012, 2017 and 2027, and $23.0 million aggregate principal amount of 6.59% Senior Notes due 2038 of NHP, which are subject to repurchase, at the option of the holders, on July 7 of each of 2013, 2018, 2023 and 2028.

Unsecured Revolving Credit Facilities and Term Loans

As of September 30, 2011, we had $1.0 billion of aggregate borrowing capacity under our then-existing unsecured revolving credit facilities, all of which was scheduled to mature on April 26, 2012. Borrowings under our unsecured revolving credit facilities bore interest at a fluctuating rate per annum (based on U.S. or Canadian LIBOR, the Canadian Bankers’ Acceptance rate, or the U.S. or Canadian Prime rate), plus an applicable percentage based on our consolidated leverage. At September 30, 2011, the applicable percentage was 2.80%. Our unsecured revolving credit facilities also had a 20 basis point facility fee. At September 30, 2011, we had $474.0 million of borrowings outstanding, $8.3 million of outstanding letters of credit and $517.7 million of available borrowing capacity under our unsecured revolving credit facilities, and we were in compliance with all covenants under our unsecured revolving credit facilities.

Effective October 18, 2011, we repaid all borrowings outstanding and terminated the commitments under our unsecured revolving credit facilities and entered into a new unsecured revolving credit facility. Our new unsecured revolving credit facility provides us with $2.0 billion of aggregate borrowing capacity, which may be increased, at our option subject to the satisfaction of certain conditions, to up to $2.5 billion, and includes sublimits of (i) up to $200 million for letters of credit, (ii) up to $200 million for swingline loans, (iii) up to $250 million for loans in certain alternative currencies, and (iv) up to 50% of the facility for certain negotiated rate loans. Borrowings under our new unsecured revolving credit facility bear interest at a fluctuating rate per annum (based on the applicable LIBOR for Eurocurrency rate loans and the higher of (i) the federal funds rate plus 0.50%, (ii) the administrative agent’s prime rate and (iii) the applicable LIBOR plus 1.0% for base rate loans, plus, in each case, an applicable percentage based on our senior unsecured long-term debt ratings). At October 18, 2011, the applicable percentage was 1.25% for Eurocurrency rate loans and 0.25% for base rate loans. We also pay a facility fee ranging from 15 to 45 basis points per annum (based on our senior unsecured long-term debt ratings) on the aggregate revolving commitments under our new unsecured revolving credit facility. At October 18, 2011, the facility fee was 25 basis points. Borrowings under our new unsecured revolving credit facility mature on October 16, 2015, but may be extended, at our option subject to the satisfaction of certain conditions, for an additional period of one year.

Our new unsecured revolving credit facility imposes certain customary restrictions on us, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers, sales of assets 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 leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth, and contains customary events of default.

As of November 2, 2011, we had $727 million of borrowings outstanding, $8 million of outstanding letters of credit and $1.26 billion of available borrowing capacity under our new unsecured revolving credit facility.

In connection with the NHP acquisition, on July 1, 2011, we acquired additional liquidity from an $800.0 million senior unsecured term loan previously extended to NHP. At our option, borrowings under the term loan, which are available from time to time on a non-revolving basis, bear interest at the applicable LIBOR plus 1.50% (1.69% at September 30, 2011) or the “Alternate Base Rate” plus 0.50% (we had no base rate borrowings outstanding at September 30, 2011). We pay a facility fee of 10 basis points per annum on the unused commitments under the term loan agreement. Borrowings under the term loan mature on June 1, 2012. At September 30, 2011, we had $250.0 million of borrowings outstanding and $550.0 million of available borrowing capacity under the term loan, and we were in compliance with all covenants under the term loan. On November 1, 2011, we repaid the $250.0 million of borrowings outstanding and continue to have $550.0 million of available borrowing capacity under the term loan.

Mortgages

We assumed mortgage debt of $1.2 billion and $0.4 billion, respectively, in connection with our Atria Senior Living and NHP acquisitions.

In February 2011, we repaid in full mortgage loans outstanding in the aggregate principal amount of $307.2 million and recognized a loss on extinguishment of debt of $16.5 million in connection with this repayment in the first quarter of 2011.

Senior Notes

In May 2011, we issued and sold $700.0 million aggregate principal amount of 4.750% senior notes due 2021, at a public offering price equal to 99.132% of par for total proceeds of $693.9 million, before the underwriting discount and expenses.

In July 2011, we redeemed $200.0 million principal amount of our outstanding 6¹/2% senior notes due 2016, at a redemption price equal to 103.25% of par, plus accrued and unpaid interest to the redemption date, pursuant to the call option contained in the indenture governing the notes. As a result, we paid a total of $206.5 million, plus accrued and unpaid interest, on the redemption date and recognized a loss on extinguishment of debt of $8.7 million during the third quarter of 2011.

As a result of the NHP acquisition, we assumed $991.6 million aggregate principal amount of outstanding unsecured senior notes of NHP. On July 15, 2011, we repaid in full, at par, $339.0 million principal amount then outstanding of NHP’s 6.50% senior notes due 2011 upon maturity. The remaining NHP senior notes outstanding bear interest at fixed rates ranging from 6.00% to 8.25% per annum and have maturity dates ranging from July 1, 2012 to July 7, 2038, subject in certain cases to earlier repayment at the option of the holders.

Capital Leases

As of September 30, 2011, we leased eight seniors housing communities pursuant to arrangements that we assumed in connection with the Atria Senior Living acquisition which are accounted for as capital leases. Rent under each capital lease is subject to increase based upon changes in the Consumer Price Index or gross revenues attributable to the property, subject to certain limits, as defined in the applicable lease agreement. Pursuant to each capital lease agreement, we have a bargain option to purchase the leased property and an option to exercise renewal terms.

Future minimum lease payments required under the capital lease agreements, including amounts that would be due under purchase options, as of September 30, 2011 are as follows (in thousands):


2011	$	2,343
2012		9,446
2013		9,573
2014		9,699
2015		9,826
Thereafter		172,553

Total minimum lease payments		213,440
Less: Amount related to interest		(70,321	)

	$	143,119

Net assets held under capital leases are included in net real estate investments on our Consolidated Balance Sheets and totaled $226.9 million and $0 as of September 30, 2011 and December 31, 2010, respectively.