Debt

3 Months Ended

Mar. 31, 2021

Bank Line of Credit and Term Loan

On May 23, 2019, the Company executed a $2.5 billion unsecured revolving line of credit facility (the “Revolving Facility”), which matures on May 23, 2023 and contains two six-month extension options, subject to certain customary conditions. Borrowings under the Revolving Facility accrue interest at LIBOR plus a margin that depends on credit ratings of the Company’s senior unsecured long-term debt. The Company pays a facility fee on the entire revolving commitment that depends on its credit ratings. Based on those credit ratings at March 31, 2021, the margin on the Revolving Facility was 0.83% and the facility fee was 0.15%. At March 31, 2021, the Company had $110 million outstanding under the Revolving Facility, with a weighted average interest rate of 1.23%.

In May 2019, the Company also entered into a $250 million unsecured term loan facility, which the Company fully drew down during the second quarter of 2019 (the “2019 Term Loan” and, together with the Revolving Facility, the “Facilities”). The 2019 Term Loan matures on May 23, 2024. Based on credit ratings for the Company’s senior unsecured long-term debt at March 31, 2021, the 2019 Term Loan accrues interest at a rate of LIBOR plus 0.90%, with a weighted average effective interest rate of 1.10%.

The Facilities include a feature that allows the Company to increase the borrowing capacity by an aggregate amount of up to $750 million, subject to securing additional commitments. The Facilities also contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements: (i) limit the ratio of Enterprise Total Indebtedness to Enterprise Gross Asset Value to 60%; (ii) limit the ratio of Enterprise Secured Debt to Enterprise Gross Asset Value to 40%; (iii) limit the ratio of Enterprise Unsecured Debt to Enterprise Unencumbered Asset Value to 60%; (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times; and (v) require a minimum Consolidated Tangible Net Worth of $7.0 billion. At March 31, 2021, the Company believes it was in compliance with each of these restrictions and requirements of the Facilities.

Commercial Paper Program

In September 2019, the Company established an unsecured commercial paper program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, unsecured short-term debt securities with varying maturities. Amounts available under the Commercial Paper Program may be borrowed, repaid, and re-borrowed from time to time, with the maximum aggregate face or principal amount outstanding at any one time not exceeding $1.0 billion. Amounts borrowed under the Commercial Paper Program will be sold on terms that are customary for the U.S. commercial paper market and will be at least equal in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness. The Company uses its Revolving Facility as a liquidity backstop for the repayment of unsecured short-term debt securities issued under the Commercial Paper Program. At March 31, 2021, the Company had $928 million of securities outstanding under the Commercial Paper Program, with original maturities of one month and a weighted average interest rate of 0.26%. At December 31, 2020, the Company had $130 million of securities outstanding under the Commercial Paper Program, with original maturities of one month and a weighted average interest rate of 0.30%.

In April 2021, the Company increased the maximum aggregate face or principal amount outstanding at any one time for the Commercial Paper Program from $1.0 billion to $1.25 billion.

Senior Unsecured Notes

At March 31, 2021, the Company had senior unsecured notes outstanding with an aggregate principal balance of $4.30 billion. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at March 31, 2021.

During the three months ended March 31, 2021, the Company had no senior unsecured note issuances.

The following table summarizes the Company’s senior unsecured notes repurchases and redemptions during the three months ended March 31, 2021 (dollars in thousands):


Payoff Date(1)	Amount		Coupon Rate		Maturity Year
January 28, 2021	$	112,000	4.25	%	2023
January 28, 2021	$	201,000	4.20	%	2024
January 28, 2021	$	469,000	3.88	%	2024
February 26, 2021	$	188,000	4.25	%	2023
February 26, 2021	$	149,000	4.20	%	2024
February 26, 2021	$	331,000	3.88	%	2024

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(1)Upon completing the repurchases and redemptions of all outstanding 4.25%, 4.20%, and 3.88% senior unsecured notes due in 2023 and 2024, the Company recognized a $164 million loss on debt extinguishment.

On May 4, 2021, the Company announced the commencement of tender offers to purchase up to an aggregate principal amount of $550 million for cash, targeting (i) $250 million of the Company’s 3.40% senior unsecured notes due in 2025 and (ii) $300 million of the Company’s 4.00% senior unsecured notes due in 2025.

The following table summarizes the Company’s senior unsecured notes issuances during the year ended December 31, 2020 (dollars in thousands):


Issue Date	Amount		Coupon Rate		Maturity Year
Year ended December 31, 2020:
June 23, 2020	$	600,000	2.88	%	2031

The following table summarizes the Company’s senior unsecured notes repurchases and redemptions during the year ended December 31, 2020 (dollars in thousands):


Payoff Date	Amount		Coupon Rate		Maturity Year
Year ended December 31, 2020:
July 9, 2020(1)	$	300,000	3.15	%	2022
June 24, 2020(2)	$	250,000	4.25	%	2023

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(1)Upon completing the redemption of all outstanding 3.15% senior unsecured notes due in 2022, the Company recognized an $18 million loss on debt extinguishment.

(2)Upon repurchasing a portion of the 4.25% senior unsecured notes due in 2023, the Company recognized a $26 million loss on debt extinguishment.

Mortgage Debt

At March 31, 2021 and December 31, 2020, the Company had $215 million and $217 million, respectively, in aggregate principal of mortgage debt outstanding (excluding mortgage debt on assets held for sale and discontinued operations), which is secured by six healthcare facilities, with an aggregate carrying value of $511 million and $517 million, respectively.

Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets, and is non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires insurance on the assets, and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.

During the three months ended March 31, 2021 and 2020, the Company made aggregate principal repayments of mortgage debt of $42 million and $5 million, respectively. The amount of repayments during the three months ended March 31, 2021 includes the repayment of $39 million of variable rate secured debt on two SHOP assets classified as discontinued operations and $1 million of scheduled repayments on mortgage debt classified as discontinued operations. During the three months ended March 31, 2020, $4 million of the repayments were associated with mortgage debt classified as discontinued operations.

In April 2021, in conjunction with the acquisition of the MOB Portfolio, the Company issued $142 million of secured mortgage debt (see Note 4).

In conjunction with the sale of the Aegis NNN Portfolio (see Note 5) in December 2020, the Company repaid $6 million of variable rate secured mortgage debt on one SHOP asset classified as discontinued operations as of December 31, 2020.

In November 2020, upon consolidating one property as part of a joint venture dissolution, the Company assumed $36 million of secured mortgage debt (classified as liabilities related to assets held for sale and discontinued operations, net) maturing in 2025 (see Note 4).

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at March 31, 2021 (in thousands):


							Senior Unsecured Notes(2)				Mortgage Debt(3)
Year	Bank Line of Credit		Commercial Paper(1)		Term Loan		Amount		Interest Rate		Amount		Interest Rate		Total
2021 (nine months)	$	—	$	—	$	—	$	—	—	%	$	11,572	4.86	%	$	11,572
2022	—		—		—		—		—	%	4,843		3.80	%	4,843
2023	110,000		928,150		—		—		—	%	89,874		3.80	%	1,128,024
2024	—		—		250,000		—		—	%	3,050		3.80	%	253,050
2025	—		—		—		1,350,000		3.93	%	3,209		3.80	%	1,353,209
Thereafter	—		—		—		2,950,000		3.68	%	102,789		3.54	%	3,052,789
	110,000		928,150		250,000		4,300,000				215,337				5,803,487
(Discounts), premium and debt costs, net	—		—		(757)		(44,303)				4,622				(40,438)
	110,000		928,150		249,243		4,255,697				219,959				5,763,049
Debt on assets held for sale and discontinued operations(4)	—		—		—		—				278,172				278,172
	$	110,000	$	928,150	$	249,243	$	4,255,697			$	498,131			$	6,041,221

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(1)Commercial Paper Program borrowings are backstopped by the Revolving Facility. As such, we calculate the weighted average remaining term of our Commercial Paper Program borrowings using the maturity date of our Revolving Facility.

(2)Effective interest rates on the senior notes range from 3.10% to 6.91% with a weighted average effective interest rate of 3.77% and a weighted average maturity of 8 years.

(3)Excluding mortgage debt on assets classified as held for sale and discontinued operations, effective interest rates on the mortgage debt range from 3.42% to 5.91% with a weighted average effective interest rate of 3.73% and a weighted average maturity of 4 years.

(4)Represents mortgage debt on assets held for sale and discontinued operations with interest rates ranging from 3.45% to 5.88% that mature between 2025 and 2044.