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Debt
 3 Months Ended
Sep. 30, 2021
Debt Instruments [Abstract]  
Debt Disclosure Debt
Debt consists of the following ($ in thousands):
September 30,
2021		December 31,
2020
Revolving credit facility - unsecured$— $298,000 
Bank term loans - unsecured400,000 650,000 
Senior notes - unsecured, net of discount of $3,002
396,998 — 
Private placement term loans - unsecured400,000 400,000 
Fannie Mae term loans - secured, non-recourse95,077 95,354 
Convertible senior notes - unsecured— 60,000 
Unamortized loan costs(6,788)(4,069)
$1,285,287 $1,499,285 
Aggregate principal maturities of debt as of September 30, 2021 are as follows ($ in thousands):

Remainder of 2021$95 
2022100,389 
2023475,408 
202475,425 
2025143,761 
2026— 
Thereafter496,997 
1,292,075 
Less: unamortized loan costs(6,788)
$1,285,287 

Convertible senior notes

On April 1, 2021, our 3.25% senior unsecured convertible notes (the “Convertible Notes”) matured. The Company paid $67.1 million, including accrued interest of $1.0 million and a $6.1 million conversion premium, to retire the Convertible Notes. The conversion premium was recorded as a reduction of “Capital in excess of par value” in our Condensed Consolidated Balance Sheet as of September 30, 2021.

Unsecured revolving credit facility and bank term loans

Our unsecured bank credit facility consists of two term loans - $100.0 million maturing in August 2022 and $300.0 million maturing in September 2023 - and a $550.0 million revolving credit facility that was initially scheduled to mature in August 2021. In April 2021, the Company elected to exercise the extension option on the revolving credit facility available after payment of a 10 basis point extension fee totaling $0.6 million, extending the maturity of the revolver to August 2022. Some combination of cash on hand, proceeds from recent and planned asset sales and operating cash flows is expected to be used to pay off the $100.0 million term loan at its maturity in August 2022. We also plan to execute a multiple year extension of our revolving credit facility prior to the August 2022 maturity date at an amount at least equal to the current $550.0 million capacity. We have swap agreements to fix the interest rates on $400.0 million of term loans that expire in December 2021.

In January 2021, we repaid a $100.0 million term loan that was entered into July 2020 with the net proceeds from the 2031 Senior Notes offering discussed below. The term loan bore interest at a rate of 30-day LIBOR (with a 50 basis point floor) plus 185 basis points (“bps”), based on our current leverage ratios. Upon repayment, the Company expensed approximately $0.5 million of deferred financing cost associated with this loan which is included in “Loss on early retirement of debt” in our Condensed Consolidated Statement of Income for the nine months ended September 30, 2021.

The revolving facility fee is currently 25 bps per annum and based on our current credit ratings, the facility presently provides for floating interest on the revolver and the term loans at 30-day LIBOR plus 120 bps and a blended 128 bps, respectively. At September 30, 2021 and December 31, 2020, 30-day LIBOR was 8 bps and 14 bps, respectively.

At September 30, 2021, we had $550.0 million available to draw on the revolving portion of our credit facility, subject to usual and customary covenants. Among other stipulations, the unsecured credit facility agreement requires that we maintain certain financial ratios within limits set by our creditors. At September 30, 2021, we were in compliance with these ratios.

Pinnacle Bank is a participating member of our banking group. A member of NHI’s Board of Directors and chairman of our audit committee is also the chairman of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. NHI’s local banking transactions are conducted primarily through Pinnacle Bank.
Senior Notes 2031

On January 26, 2021, we issued $400.0 million aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”). The 2031 Senior Notes were sold at an issue price of 99.196% of face value before the underwriters’ discount. Our net proceeds from the 2031 Senior Notes offering, after deducting underwriting discounts and expenses, were approximately $392.3 million. We used the net proceeds from the 2031 Senior Notes offering to repay our $100.0 million term loan that was entered into in July 2020 and reduce borrowings outstanding under our revolving credit facility.

The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of September 30, 2021, we were in compliance with all affirmative and negative covenants, including financial covenants for our 2031 Senior Notes borrowings.

Private placement term loans

Our unsecured private placement term loans, payable interest-only, are summarized below ($ in thousands):

AmountInceptionMaturityFixed Rate
$125,000 January 2015January 20233.99%
50,000 November 2015November 20233.99%
75,000 September 2016September 20243.93%
50,000 November 2015November 20254.33%
100,000 January 2015January 20274.51%
$400,000 

Except for specific debt-coverage ratios and net worth minimums, covenants pertaining to the private placement term loans are generally conformed with those governing our credit facility. Our unsecured private placement term loan agreements include a rate increase provision that is effective if any rating agency lowers our credit rating on our senior unsecured debt below investment grade and our compliance leverage increases to 50% or more.

Fannie Mae term loans

In March 2015, we obtained $78.1 million in Fannie Mae financing. The term-debt financing consists of interest-only payments at an annual rate of 3.79% and a 10-year maturity. The mortgages are non-recourse and secured by thirteen properties leased to Bickford. In a December 2017 acquisition, we assumed additional Fannie Mae debt that amortizes through 2025 when a balloon payment will be due, is subject to prepayment penalties until 2024, bears interest at a nominal rate of 4.6%, and has a remaining balance of $17.0 million at September 30, 2021. Collectively, these notes are secured by facilities having a net book value of $127.0 million at September 30, 2021.

Interest Rate Swap Agreements

Our existing interest rate swap agreements will collectively continue through December 2021 to hedge against fluctuations in variable interest rates applicable to $400.0 million of our bank loans. During the remainder of 2021, approximately $1.8 million of losses, which are included in “Accumulated other comprehensive loss” in our Condensed Consolidated Balance Sheets, are projected to be reclassified into earnings.

As of September 30, 2021, we employed the following interest rate swap contracts to mitigate our interest rate risk on our bank term and revolver loans described above ($ in thousands):

Date EnteredMaturity DateSwap RateRate IndexNotional AmountFair Value (Liability)
March 2019December 20212.22%1-month LIBOR$100,000 $(533)
March 2019December 20212.21%1-month LIBOR$100,000 $(537)
June 2019December 20211.61%1-month LIBOR$150,000 $(567)
June 2019December 20211.63%1-month LIBOR$50,000 $(191)
If the fair value of the hedge is an asset, we include it in our Condensed Consolidated Balance Sheets in the line item “Other assets”, and, if a liability, as a component of “Accounts payable and accrued expenses”. See Note 11 for fair value disclosures about our interest rate swap agreements. Net liability balances for our hedges included as components of “Accounts payable and accrued expenses” on September 30, 2021 and December 31, 2020, were $1.8 million and $7.1 million, respectively.

The following table summarizes interest expense ($ in thousands):
Three Months EndedNine Months Ended
September 30,September 30,
2021202020212020
Interest expense on debt at contractual rates$10,234 $10,129 $31,055 $33,701 
Losses reclassified from accumulated other
comprehensive income into interest expense1,851 1,778 5,449 4,533 
Capitalized interest(6)(9)(40)(169)
Amortization of debt issuance costs, debt discount and other636 994 2,064 2,524 
Total interest expense$12,715 $12,892 $38,528 $40,589