9. Debt Obligations

Bank Borrowings. During 2012, we amended our Unsecured Credit Agreement increasing the commitment to $240,000,000 with the opportunity to increase the credit amount up to a total of $350,000,000. Additionally, the drawn pricing was decreased by 25 basis points, the undrawn pricing was decreased by 10 basis points and the maturity of the facility was extended for one additional year to May 25, 2016. The amendment also provides for a one-year extension option at our discretion, subject to customary conditions. Based on our leverage ratios during 2012, the amended facility provides for interest annually at LIBOR plus 125 basis points and the unused commitment fee was 25 basis points. Subsequent to December 31, 2012, we anticipate that the annual interest will increase to LIBOR plus 150 basis points and 30 basis points for the unused commitment fee based on our leverage ratios at December 31, 2012.

Financial covenants contained in the Unsecured Credit Agreement, which are measured quarterly, require us to maintain, among other things:

(i)

a ratio of total indebtedness to total asset value not greater than 0.5 to 1.0;

(ii)

a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

(iii)

a ratio of unsecured debt to the value of the unencumbered asset pool not greater than 0.6 to 1.0; and

(iv)

a ratio of EBITDA, as calculated in the Unsecured Credit Agreement, to fixed charges not less than 1.50 to 1.0.

During 2012 we borrowed $153,500,000 and repaid $94,000,000 under our Unsecured Credit Agreement. At December 31, 2012, we had $115,500,000 outstanding at an interest rate of LIBOR plus 1.25% and $124,500,000 available for borrowing. During January 2013, we borrowed $2,000,000 at an interest rate of LIBOR plus 1.25%. After this borrowing, we had $117,500,000 outstanding and $122,500,000 available for borrowing. At December 31, 2012 and 2011, we were in compliance with all covenants.

Senior Unsecured Notes. At December 31, 2012, we had $185,800,000 outstanding under our Senior Unsecured Notes with a weighted average interest rate of 5.2%. During 2012, we sold 12-year senior unsecured notes in the aggregate amount of $85,800,000 to a group of institutional investors in a private placement transaction. The notes bear interest at 5.0%, mature on July 19, 2024 and have scheduled annual principal pay downs of $17,160,000 in years 8 through 12. We used a portion of the proceeds to pay down our Unsecured Credit Agreement and used the remaining proceeds to fund acquisitions.

During 2011, we sold to affiliates and managed accounts of Prudential Investment Management, Inc. (individually and collectively "Prudential") $50,000,000 aggregate principal amount of 4.80% senior unsecured term notes fully amortizing to maturity on July 20, 2021. Additionally, we entered into an Amended and Restated Note Purchase and Private Shelf agreement with Prudential which provides for the possible issuance of up to an additional $100,000,000 of senior unsecured fixed-rate term notes through October 19, 2014. Financial covenants contained in the Amended and Restated Note Purchase and Private Shelf agreement are substantially the same as the financial covenants contained in our Unsecured Credit Agreement.

During 2010, we sold to Prudential $25,000,000 aggregate principal amount of 5.25% senior unsecured term notes due July 14, 2015 and $25,000,000 aggregate principal amount of 5.74% senior unsecured term notes fully amortizing to maturity on July 14, 2019.

Bonds Payable. At December 31, 2012 and 2011 we had outstanding principal of $2,635,000 and $3,200,000, respectively, on multifamily tax-exempt revenue bonds that are secured by five assisted living properties in Washington. These bonds bear interest at a variable rate that is reset weekly and mature during 2015. For the year ended December 31, 2012, the weighted average interest rate, including letter of credit fees, on the outstanding bonds was 2.2%. During 2012 and 2011 we paid $565,000 and $530,000, respectively, in regularly scheduled principal payments. At December 31, 2012 and 2011, the aggregate carrying value of real estate properties securing our bonds payable was $6,650,000 and $6,915,000, respectively.

Scheduled Principal Payments. The following table represents our long term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2012, and excludes the effects of interest (in thousands):

	Total			2013		2014		2015		2016		2017		Thereafter

Bank borrowings	$	115,500	⁽¹⁾	$	—	$	—	$	—	$	115,500	$	—	$	—
Senior unsecured notes		185,800			—		4,167		29,166		16,667		14,167		121,633
Bonds payable		2,635			600		635		1,400		—		—		—

	$	303,935		$	600	$	4,802	$	30,566	$	132,167	$	14,167	$	121,633

⁽¹⁾: At December 31, 2012 we had $124,500 available for borrowing under our Unsecured Credit Agreement. During January 2013, we borrowed $2,000 under our Unsecured Credit Agreement. After this borrowing, we had $117,500 outstanding and $122,500 available for borrowing.