Indebtedness

9 Months Ended

Sep. 30, 2012

Indebtedness

Indebtedness

Note 7.  Indebtedness

In this Note 7, references to we, us, our or CWH refer to CWH and its consolidated subsidiaries other than SIR and its consolidated subsidiaries, unless noted otherwise.

In January 2012, we prepaid at par all $150,680 of our then outstanding 6.95% senior notes due 2012, using cash on hand and borrowings under our revolving credit facility.  In connection with this prepayment, we recorded a loss on early extinguishment of debt of $67 from the write off of unamortized discounts and deferred financing fees.

Also in January 2012, we assumed a mortgage totaling $147,872, which was recorded at a fair value of $160,330, in connection with our acquisition of a property.  This mortgage bears interest at a rate of 6.29%, requires monthly principal and interest payments and matures in 2016.

In February 2012, we repaid at maturity $5,404 of 7.31% mortgage debt using cash on hand.

In May 2012, we prepaid at par $12,720 of 6.06% mortgage debt using cash on hand.  In connection with this prepayment, we recorded a loss on early extinguishment of debt of $1,608 from the write off of unamortized discounts and deferred financing fees.

Also, in May 2012, we assumed a mortgage totaling $29,012, which was recorded at a fair value of $31,148, in connection with an acquisition of a property.  This mortgage bears interest at a rate of 5.69%, requires monthly principal and interest payments and matures in 2021.

In July 2012, we prepaid at par all $190,980 of our 6.50% unsecured senior notes due 2013 using cash on hand and borrowings under our revolving credit facility.  In connection with this prepayment, we recorded a loss on early extinguishment of debt of $220 from the write off of unamortized discounts and deferred financing fees.

Also in July 2012, we issued $175,000 of unsecured senior notes in a public offering, raising net proceeds of approximately $169,000.  These notes bear interest at 5.75%, require quarterly interest payments and mature in August 2042.  We used the net proceeds from these notes to redeem in August 2012 all 6,000,000 shares of our 7 1/8% series C preferred stock for par plus accrued and unpaid distributions (approximately $150,000), and used any excess proceeds to partially fund certain acquisitions.

In September 2012, we assumed a mortgage totaling $40,328, which was recorded at a fair value of $42,490, in connection with an acquisition of a property.  This mortgage bears interest at a rate of 5.30%, requires monthly principal and interest payments and matures in 2021.

We have a $750,000 unsecured revolving credit facility that we use for acquisitions, working capital and general business purposes.  The credit facility matures on October 19, 2015 and includes an option for us to extend the facility by one year to October 19, 2016, subject to our payment of a fee and satisfaction of certain conditions.  Our revolving credit facility includes a feature under which maximum borrowings may be increased to up to $1,500,000 in certain circumstances.  Borrowings under our revolving credit facility bear interest at LIBOR plus a spread of 125 basis points.  We also pay a facility fee of 25 basis points per annum on the total amount of lending commitments under our revolving credit facility.  Both the interest rate spread and the facility fee are subject to adjustment based upon changes to our credit ratings.  The interest rate on our revolving credit facility averaged 1.5% and 2.2% per annum for the nine months ended September 30, 2012 and 2011, respectively.  As of September 30, 2012, we had $160,000 outstanding and $590,000 available under our revolving credit facility.

We also have a $557,000 unsecured term loan, $500,000 of which matures in December 2016 and $57,000 of which matures in December 2012.  Repayments with respect to $500,000 of our term loan may be made at any time without penalty.  Our term loan includes a feature under which maximum borrowings may be increased to up to $1,000,000 in certain circumstances.  Our term loan bears interest at LIBOR plus a spread of 150 basis points that is subject to adjustment based on our credit ratings.  The interest rate on our term loan averaged 1.8% and 2.2% for the nine months ended September 30, 2012 and 2011, respectively.

Simultaneous with the SIR IPO on March 12, 2012, SIR entered into a $500,000 revolving credit facility, or the SIR revolving credit facility, that is available to SIR for general business purposes, including acquisitions.  The SIR revolving credit facility is scheduled to mature on March 11, 2016 and subject to SIR’s payment of an extension fee and meeting certain other conditions, SIR has the option to extend the stated maturity date by one year.  The SIR revolving credit facility includes a feature under which maximum borrowings may be increased to up to $1,000,000 in certain circumstances.  Borrowings under the SIR revolving credit facility bear interest at LIBOR plus a spread.  SIR also pays a per annum facility fee on the total amount of lending commitments under the SIR revolving credit facility.  Both the interest rate spread and the facility fee are subject to adjustment based upon changes to SIR’s debt leverage or credit ratings.  As of September 30, 2012, the SIR revolving credit facility spread was 130 basis points and the SIR facility fee was 30 basis points.  The interest rate on the SIR revolving credit facility averaged 1.5% for the period from March 12, 2012 to September 30, 2012.  As of September 30, 2012, SIR had $92,000 outstanding and $408,000 available under the SIR revolving credit facility.  In July 2012, SIR amended the SIR revolving credit facility to terminate the pledge of equity of certain of SIR’s subsidiaries which previously secured this facility.

In July 2012, SIR entered into a five year $350,000 unsecured term loan, or the SIR term loan, with a group of institutional lenders.  The SIR term loan matures on July 11, 2017 and is prepayable without penalty at any time.  In addition, the SIR term loan includes a feature under which maximum borrowings may be increased to up to $700,000 in certain circumstances.  SIR used the net proceeds of the SIR term loan to repay amounts outstanding under the SIR revolving credit facility and for general business activities, including acquisitions.  The amount outstanding under the SIR term loan bears interest at LIBOR plus a spread that is subject to adjustment based upon changes to SIR’s debt leverage or credit ratings, if any.  As of September 30, 2012, the spread on the SIR term loan was 155 basis points.  The interest rate on the SIR term loan averaged 1.8% for the period from July 12, 2012 to September 30, 2012.

In September 2012, SIR assumed a mortgage totaling $18,500, which was recorded at a fair value of $19,984, in connection with an acquisition of two properties.  This mortgage bears interest at a rate of 5.95%, requires monthly principal and interest payments and matures in 2017.  Also in September 2012, SIR assumed a mortgage totaling $7,500, which was recorded at a fair value of $7,947, in connection with the acquisition of a property.  This mortgage bears interest at a rate of 5.689%, requires monthly interest payments and matures in 2016.

Our public debt indentures, our revolving credit facility agreement, our term loan agreement, SIR’s revolving credit facility agreement and SIR’s term loan agreement contain a number of financial and other covenants, including credit facility and term loan covenants that restrict our or SIR’s ability to make distributions under certain circumstances.  At September 30, 2012, we believe we and SIR, as applicable, were in compliance with all of our respective covenants under our public debt indentures, our revolving credit facility, our term loan, SIR’s revolving credit facility and SIR’s term loan agreements.

At September 30, 2012, 25 of our and SIR’s properties costing $1,154,955 with an aggregate net book value of $1,028,581 were secured by mortgage notes totaling $869,384 (including net discounts and premiums) maturing from 2012 through 2026.

In October 2012, we repaid at maturity $4,507 of 6.00% mortgage debt using cash on hand.