Notes Payable:

Each of NNN’s outstanding series of unsecured notes is summarized in the table below (dollars in thousands):



Notes	Issue Date	Principal		Discount⁽¹⁾		Net Price		Stated Rate	Effective Rate⁽²⁾	Maturity Date
2022	August 2012	$	325,000	$	4,989	$	320,011	3.800%	3.985%	October 2022
2023⁽³⁾	April 2013	350,000		2,594		347,406		3.300%	3.388%	April 2023
2024⁽⁴⁾	May 2014	350,000		707		349,293		3.900%	3.924%	June 2024
2025⁽⁵⁾	October 2015	400,000		964		399,036		4.000%	4.029%	November 2025
2026⁽⁶⁾	December 2016	350,000		3,860		346,140		3.600%	3.733%	December 2026
2027⁽⁷⁾	September 2017	400,000		1,628		398,372		3.500%	3.548%	October 2027
2028⁽⁸⁾	September 2018	400,000		2,848		397,152		4.300%	4.388%	October 2028
2048	September 2018	300,000		4,239		295,761		4.800%	4.890%	October 2048


⁽¹⁾	The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.


⁽²⁾	Includes the effects of the discount at issuance.


⁽³⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $240,000. Upon issuance of the 2023 Notes, NNN terminated the forward starting swaps resulting in a liability of $3,156, of which $3,141 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the notes using the effective interest method.


⁽⁴⁾	NNN entered into three forward starting swaps with an aggregate notional amount of $225,000. Upon issuance of the 2024 Notes, NNN terminated the forward starting swaps resulting in a liability of $6,312, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the notes using the effective interest method.


⁽⁵⁾	NNN entered into four forward starting swaps with an aggregate notional amount of $300,000. Upon issuance of the 2025 Notes, NNN terminated the forward starting swaps resulting in a liability of $13,369, which was deferred in other comprehensive income. The deferred liability is being amortized over the term of the notes using the effective interest method.


⁽⁶⁾	NNN entered into two forward starting swaps with an aggregate notional amount of $180,000. Upon issuance of the 2026 Notes, NNN terminated the forward starting swaps resulting in a gain of $13,345, which was deferred in other comprehensive income. The deferred asset is being amortized over the term of the notes using the effective interest method.


⁽⁷⁾	NNN entered into two forward starting swaps with an aggregate notional amount of $250,000. Upon issuance of the 2027 Notes, NNN terminated the forward starting swaps resulting in a liability of $7,690, of which $7,688 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the notes using the effective interest method.


⁽⁸⁾	NNN entered into two forward starting swaps with an aggregate notional amount of $250,000. Upon issuance of the 2028 Notes, NNN terminated the forward starting swaps resulting in a gain of $4,080, which was deferred in other comprehensive income. The gain is being amortized over the term of the notes using the effective interest method.

Each series of the notes represents senior, unsecured obligations of NNN and is subordinated to all secured indebtedness of NNN. Each of the notes is redeemable at the option of NNN, in whole or in part, at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus all accrued and unpaid interest thereon through the redemption date and (ii) the make-whole amount, if any, as defined in the applicable supplemental indenture relating to the notes.

In connection with the outstanding debt offerings, NNN incurred debt issuance costs totaling $26,932,000 consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. Debt issuance costs for all note issuances have been deferred and presented as a reduction to notes payable and are being amortized over the term of the respective notes using the effective interest method.

In October 2017, NNN repaid the $250,000,000 6.875% notes payable that were due in October 2017.

In October 2018, NNN redeemed the $300,000,000 5.500% notes payable that were due in July 2021. The notes were redeemed at a price equal to 100% of the principal amount, plus (i) a make-whole amount of $18,240,000, and (ii) all accrued and unpaid interest.

NNN’s long-term debt maturities for the next five years include the 2022 Notes and 2023 Notes for an aggregate principal balance of $675,000,000.

In accordance with the terms of the indenture, pursuant to which NNN’s notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios and (ii) certain interest coverage. At December 31, 2018, NNN was in compliance with those covenants.