Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

Bank Line of Credit and Term Loan

On May 23, 2019, the Company executed a $2.5 billion unsecured revolving line of credit facility, with a maturity date of May 23, 2023 and two six-month extension options, subject to certain customary conditions. Also in May 2019, the Company entered into a $250 million unsecured term loan facility, with a maturity date of May 23, 2024 (the “2019 Term Loan”). In July 2021, the Company repaid the $250 million 2019 Term Loan.

In September 2021, the Company executed an amended and restated unsecured revolving line of credit (the “Revolving Facility”) to increase total revolving commitments from $2.5 billion to $3.0 billion and extend the maturity date to January 20, 2026. This maturity date may be further extended pursuant to 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 the credit ratings of the Company’s senior unsecured long-term debt. The Company also pays a facility fee on the entire revolving commitment that depends on its credit ratings. Based on the Company’s credit ratings at March 31, 2022, the margin on the Revolving Facility was 0.78% and the facility fee was 0.15%. At March 31, 2022 and December 31, 2021, the Company had no balance outstanding under the Revolving Facility.

The Revolving Facility includes 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. Further, the Revolving Facility includes customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate administered by the Federal Reserve Bank of New York. The Revolving Facility also includes a sustainability-linked pricing component whereby the applicable margin may be reduced by up to 0.025% based on the Company’s achievement of specified sustainability-linked metrics, subject to certain conditions.

The Revolving Facility also contains certain financial restrictions and other customary requirements, including financial covenants and cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreement: (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 $7.7 billion. The Company believes it was in compliance with each of these covenants at March 31, 2022.

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. During 2021, the Company increased the maximum aggregate face or principal amount that can be outstanding at any one time from $1.0 billion to $1.5 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, 2022, the Company had $1.33 billion of securities outstanding under the Commercial Paper Program, with original maturities of approximately 45 days and a weighted average interest rate of 0.93%. At December 31, 2021, the Company had $1.17 billion of securities outstanding under the Commercial Paper Program, with original maturities of approximately two months and a weighted average interest rate of 0.32%.

Senior Unsecured Notes

At each of March 31, 2022 and December 31, 2021, the Company had senior unsecured notes outstanding with an aggregate principal balance of $4.7 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, 2022.

During the three months ended March 31, 2022, the Company did not repurchase or redeem any senior unsecured notes.

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

Payoff Date	Amount		Coupon Rate		Maturity Year
May 19, 2021(1)	$	251,806	3.40	%	2025
May 19, 2021(1)	298,194		4.00	%	2025
February 26, 2021(2)	188,000		4.25	%	2023
February 26, 2021(2)	149,000		4.20	%	2024
February 26, 2021(2)	331,000		3.88	%	2024
January 28, 2021(2)	112,000		4.25	%	2023
January 28, 2021(2)	201,000		4.20	%	2024
January 28, 2021(2)	469,000		3.88	%	2024

_______________________________________

(1)Upon repurchasing a portion of the 3.40% and 4.00% senior unsecured notes due 2025, the Company recognized a $61 million loss on debt extinguishment during the year ended December 31, 2021.

(2)Upon completing the repurchases and redemptions of all outstanding 4.25%, 4.20%, and 3.88% senior unsecured notes due 2023 and 2024, the Company recognized a $164 million loss on debt extinguishment during the three months ended March 31, 2021.

During the three months ended March 31, 2022, the Company did not issue any senior unsecured notes.

In 2021, the Company completed two green bond offerings. The net proceeds from both green bonds are or will be allocated to eligible green projects, and the Company may choose to allocate or re-allocate net proceeds from such offerings to one more other eligible green projects. The following table summarizes these senior unsecured note issuances for the year ended December 31, 2021 (dollars in thousands):

Issue Date	Amount		Coupon Rate		Maturity Year
November 24, 2021	$	500,000	2.13	%	2028
July 12, 2021	450,000		1.35	%	2027

Mortgage Debt

At March 31, 2022 and December 31, 2021, the Company had $349 million and $350 million, respectively, in aggregate principal of mortgage debt outstanding, which was secured by 18 healthcare facilities, with an aggregate carrying value of $803 million and $811 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 each of the three months ended March 31, 2022 and March 31, 2021, the Company made aggregate principal repayments of mortgage debt of $1 million (excluding mortgage debt on assets held for sale and discontinued operations).

In April 2021, in conjunction with the acquisition of the MOB Portfolio, the Company originated $142 million of secured mortgage debt (see Note 3) that matures in May 2026. In April 2022, the Company terminated its existing interest rate cap agreements associated with this variable rate mortgage debt and entered into two interest rate swap contracts that are designated as cash flow hedges and mature in May 2026 (see Note 17).

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at March 31, 2022 (dollars in thousands):

					Senior Unsecured Notes(2)				Mortgage Debt(3)
Year	Bank Line of Credit		Commercial Paper(1)		Amount		Interest Rate		Amount		Interest Rate		Total
2022	$	—	$	—	$	—	—	%	$	3,778	3.80	%	$	3,778
2023	—		—		—		—	%	90,089		3.80	%	90,089
2024	—		—		—		—	%	7,024		3.81	%	7,024
2025	—		—		800,000		3.93	%	3,209		3.80	%	803,209
2026	—		1,330,813		650,000		3.39	%	244,523		3.11	%	2,225,336
Thereafter	—		—		3,250,000		3.24	%	366		5.91	%	3,250,366
	—		1,330,813		4,700,000				348,989				6,379,802
(Discounts), premium and debt costs, net	—		—		(45,944)				1,724				(44,220)
	$	—	$	1,330,813	$	4,654,056			$	350,713			$	6,335,582

_______________________________________

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

(2)Effective interest rates on the senior unsecured notes range from 1.54% to 6.91% with a weighted average effective interest rate of 3.39% and a weighted average maturity of 7 years.

(3)Effective interest rates on the mortgage debt range from 2.72% to 5.91% with a weighted average effective interest rate of 3.36% and a weighted average maturity of 4 years.