Notes Payable

12 Months Ended

Dec. 31, 2020

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



2023(3)	April 2013	$	350,000	$	2,594	$	347,406	3.300%	3.388%	April 2023(4)
2024(3)	May 2014	350,000		707		349,293		3.900%	3.924%	June 2024(4)
2025(3)	October 2015	400,000		964		399,036		4.000%	4.029%	November 2025(4)
2026(3)	December 2016	350,000		3,860		346,140		3.600%	3.733%	December 2026
2027(3)	September 2017	400,000		1,628		398,372		3.500%	3.548%	October 2027
2028(3)	September 2018	400,000		2,848		397,152		4.300%	4.388%	October 2028
2030(3)	March 2020	400,000		1,288		398,712		2.500%	2.536%	April 2030
2048	September 2018	300,000		4,239		295,761		4.800%	4.890%	October 2048
2050	March 2020	300,000		6,066		293,934		3.100%	3.205%	April 2050

(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 forward starting swaps which were hedging the risk of changes in forecasted interest payments on forecasted issuance of long-term debt. Upon the issuance of a series of unsecured notes, NNN terminated such derivatives, and the resulting fair value was deferred in other comprehensive income. The deferred liability (asset) is being amortized over the term of the respective notes using the effective interest method. Additional disclosure is included in Note 12 – Derivatives.

(4)The aggregate principal balance of the unsecured note maturities for the next five years is $1,100,000.

Each series of the notes represents senior, unsecured obligations of NNN and is subordinated to all secured debt 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 $31,140,000 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 March 2020, NNN redeemed the $325,000,000 3.800% notes payable that were due in October 2022. The notes were redeemed at a price equal to 100% of the principal amount, plus (i) a make-whole amount of $16,679,000, and (ii) all accrued and unpaid interest.

In accordance with the terms of the indentures, 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, 2020, NNN was in compliance with those covenants.