Indebtedness

At December 31, 2014 and 2013, our outstanding indebtedness included the following (in thousands):



					December 31,
	Interest Rate at December 31, 2014			Maturity Date	2014		2013
Unsecured revolving credit facility, at LIBOR plus a premium	1.669	%		10/19/2015	$	—	$	235,000
Unsecured term loan, at LIBOR plus a premium	2.019	%		12/15/2016	400,000		500,000
Unsecured floating rate debt	2.019	%	(1)		$	400,000	$	735,000

6.40% Senior Unsecured Notes due 2015	—	%		—	$	—	$	33,440
5.75% Senior Unsecured Notes due 2015	5.75	%		11/1/2015	138,773		138,773
6.25% Senior Unsecured Notes due 2016	6.25	%		8/15/2016	139,104		139,104
6.25% Senior Unsecured Notes due 2017	6.25	%		6/15/2017	250,000		250,000
6.65% Senior Unsecured Notes due 2018	6.65	%		1/15/2018	250,000		250,000
7.50% Senior Unsecured Notes due 2019	—	%		—	—		125,000
5.875% Senior Unsecured Notes due 2020	5.875	%		9/15/2020	250,000		250,000
5.75% Senior Unsecured Notes due 2042	5.75	%		8/1/2042	175,000		175,000
Unsecured fixed rate debt	6.125	%	(1)		$	1,202,877	$	1,361,317

3920 Arkwright Road	—	%		—	$	—	$	12,040
6200 Glenn Carlson Drive	—	%		—	—		7,987
111 Monument Circle	5.235	%		3/1/2016	116,000		116,000
225 Water Street(2)	6.03	%		5/11/2016	40,059		40,334
111 East Wacker Drive	6.29	%		7/11/2016	142,666		144,522
2501 20th Place South	7.36	%		8/1/2016	10,267		10,804
Parkshore Plaza	5.67	%		5/1/2017	41,275		41,275
600 West Chicago Avenue	—	%		—	—		265,000
1735 Market Street(3)	5.66	%		12/2/2019	171,498		173,247
206 East 9th Street	5.69	%		1/5/2021	27,965		28,391
1320 Main Street	5.3	%		6/1/2021	38,979		39,598
33 Stiles Lane	6.75	%		3/1/2022	3,132		3,456
97 Newberry Road	5.71	%		3/1/2026	6,819		7,240
Secured fixed rate debt	5.767	%	(1)		$	598,660	$	889,894
					$	2,201,537	$	2,986,211
Unamortized net premiums and discounts					6,128		19,199
					$	2,207,665	$	3,005,410


(1)	Represents weighted average interest rate at December 31, 2014.

(2)

During the quarter ended June 30, 2014, we made the decision to cease making loan servicing payments on 225 Water Street in Jacksonville, Florida. The first payment we determined not to make for this property was due on June 11, 2014. The property is secured by a non-recourse mortgage loan, with a current principal balance of $40.1 million. On October 10, 2014, we were notified by the lender that our decision to cease making loan servicing payments created an event of default effective July 11, 2014 and the lender has exercised its option to accelerate the maturity of the unpaid balance of the loan. The lender has filed a suit of foreclosure for this property. Since July 11, 2014, we have accrued interest on this loan at 10.03%, to include the 4.0% of default interest.


(3)	Interest on this loan is payable at a spread over LIBOR but has been fixed for the first seven years to December 1, 2016 by a cash flow hedge which sets the rate at approximately 5.66%.

Unsecured Revolving Credit Facility and Unsecured Term Loan:

We have a $750.0 million unsecured revolving credit facility that is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is October 19, 2015 and, subject to the payment of an extension fee and meeting certain other conditions, includes an option for us to extend the stated maturity date of our revolving credit facility by one year to October 19, 2016. Borrowings under our revolving credit facility bear interest at LIBOR plus a premium, which was 150 basis points as of December 31, 2014 and 2013. We also pay a facility fee of 35 basis points per annum on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of December 31, 2014 and 2013, the interest rate payable on borrowings under our revolving credit facility was 1.7%. As of December 31, 2014, we had no balance outstanding and $750.0 million available under our revolving credit facility.

We also have an unsecured term loan that matures in December 2016 and is prepayable without penalty at any time. Our term loan includes a feature under which maximum borrowings may be increased to up to $1.0 billion in certain circumstances. Our term loan bears interest at a rate of LIBOR plus a premium, which was 185 basis points as of December 31, 2014 and 2013. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of December 31, 2014 and 2013, the interest rate for the amount outstanding under our term loan was 2.0% and 2.0%, respectively. On December 5, 2014, we paid $100.0 million of our unsecured term loan, reducing our term loan borrowings to $400.0 million.

Our revolving credit facility agreement and our term loan agreement provide for a right to accelerate payment of all amounts due thereunder upon the occurrence and continuation of certain events of default. The removal of our former Trustees on March 25, 2014 constituted an event of default under our revolving credit facility and term loan agreements. As a consequence, the lenders under each of these agreements became entitled to exercise certain remedies, including the right to accelerate their loans and to require that their loans bear interest at the post-default rate. Effective as of April 11, 2014, we entered into separate forbearance agreements regarding our revolving credit facility and term loan agreements. Pursuant to each forbearance agreement, the applicable lenders agreed, on and subject to the terms and conditions set forth therein, to forbear during the period (which period would have expired on June 13, 2014, but for the waivers and amendments described below) from exercising certain of their rights and remedies under the revolving credit facility or term loan, as applicable, including, without limitation, their right to accelerate repayment of the loans thereunder and to require that the loans bear interest at the post-default rate. Following the election of our new Board of Trustees on May 23, 2014, we requested that the lenders provide waivers of these events of default. Effective as of June 6, 2014, we obtained such waivers and amended the revolving credit facility and term loan agreements. Pursuant to these amendments and waivers, the lenders waived the events of default arising from the removal of our former Trustees, and each of the revolving credit facility and term loan agreements was amended to:


•	remove as “Material Contracts” (i) the Business Management Agreement, dated as of June 8, 2009, as amended, by and between us and RMR, and (ii) the Amended and Restated Property Management Agreement, dated as of January 21, 2010, by and between us and RMR;


•	revise the change of control Event of Default (as defined in each of the revolving credit facility and term loan agreements) so that failure of RMR to act as sole business and property manager no longer constitutes a change of control thereunder; and


•	revise the change of control Event of Default to increase from 25% to 35% the level of voting power with respect to the Company’s shares that constitutes a change of control if acquired by any person or group.

In addition, the forbearance agreements were deemed to be terminated upon effectiveness of these amendments and waivers, other than certain provisions thereof relating to the release of claims against, and confirming no waivers by, the lenders.

On January 29, 2015, we entered into a new credit agreement, pursuant to which the lenders agreed to provide (i) a $750.0 million unsecured revolving credit facility, (ii) a $200.0 million 5-year term loan facility and (iii) a $200.0 million 7-year term loan facility. The new agreement replaces our prior credit agreement, dated as of August 9, 2010, and our prior term loan agreement, dated as of December 16, 2010. The revolving credit facility has a scheduled maturity date of January 28, 2019, which maturity date may be extended for up to two additional periods of six months at our option subject to satisfaction of certain conditions and the payment of an extension fee of 0.075% of the aggregate amount available under the revolving credit facility. The 5-year term loan and the 7-year term loan have scheduled maturity dates of January 28, 2020 and January 28, 2022, respectively. We used the proceeds of borrowings under the credit agreement to repay all amounts outstanding and due under the previous term loan agreement.

Unsecured Senior Notes:

On November 17, 2014, we prepaid at par $125.0 million of our 7.50% unsecured senior notes due 2019 and recognized a loss on early extinguishment of debt of $1.8 million from the write-off of an unamortized discount and deferred financing fees.

On September 15, 2014, we prepaid at par $33.4 million of our 6.40% unsecured senior notes due 2015.

In October 2013, we prepaid at par all $99.0 million of our 5.75% unsecured senior notes due 2014, using borrowings under our revolving credit facility.

In March 2013, we purchased a total of $670.3 million of the outstanding principal amount of the following senior notes for $726.2 million, excluding transaction costs, pursuant to a tender offer:



Senior Note	Principal		Purchase Price
5.75% Senior Notes due February 15, 2014	$	145,612	$	148,746
6.40% Senior Notes due February 15, 2015	152,560		164,140
5.75% Senior Notes due November 1, 2015	111,227		121,047
6.25% Senior Notes due August 15, 2016	260,896		292,218
	$	670,295	$	726,151

In connection with the purchase of these senior notes, we recognized a combined loss on early extinguishment of debt totaling $60.0 million, which includes the write-off of unamortized discounts and deferred financing fees and expenses.

Mortgage Notes Payable:

At December 31, 2014, 10 of our properties (14 buildings) with an aggregate net book value of $705.3 million had secured mortgage notes totaling $609.2 million (including net premiums and discounts) maturing from 2015 through 2026.

On October 31, 2014 we repaid at par the $7.8 million mortgage loan encumbering 6200 Glenn Carlson Drive.

On August 1, 2014, we prepaid at par the $265.0 million of 5.68% mortgage debt at 600 West Chicago Avenue and recognized a net gain on early extinguishment of debt of $6.7 million from the write-off of an unamortized premium, net of the write-off of unamortized deferred financing fees.

On June 27, 2014, we repaid $11.2 million of 6.14% mortgage debt and $8.5 million of 5.78% mortgage debt in connection with the sale of the related properties and recognized a loss on early extinguishment of debt of $3.3 million, included in loss on early extinguishment of debt from discontinued operations, from prepayment penalties and the write-off of unamortized discounts and deferred financing fees.

On March 11, 2014, we prepaid at par the $12.0 million of 4.95% mortgage debt at 3920 Arkwright Road using cash on hand.

In addition, we prepaid $7.1 million of 5.76% mortgage debt in December 2013, in connection with the sale of the related property. In connection with the prepayment of mortgage debt, we recorded a loss on early extinguishment of debt totaling $1.0 million from a prepayment premium and the write off of unamortized discount.

Credit Facility and Term Loan Debt Covenants:

Our public debt indenture and related supplements, our revolving credit facility agreement and our term loan agreement contain a number of financial and other covenants, including covenants that restrict our ability to incur indebtedness or to make distributions under certain circumstances and require us to maintain financial ratios and a minimum net worth. At December 31, 2014, we believe we were in compliance with all of our respective covenants under our public debt indenture and related supplements, our revolving credit facility and our term loan agreements.

Required Principal Payments:

The required principal payments due during the next five years and thereafter under all of our outstanding debt at December 31, 2014 are as follows (in thousands):



2015	$	145,973
2016	848,708
2017	295,592
2018	254,614
2019	165,422
Thereafter	491,228
	$	2,201,537