Debt Obligations

12 Months Ended

Dec. 31, 2021

Debt Obligations

Debt Obligations

9. Debt Obligations

Unsecured Credit Facility. We had an unsecured credit agreement (the “Original Credit Agreement”) that provided for a revolving aggregate commitment of the lenders of up to $600,000,000 with the opportunity to increase the commitment size of the credit agreement up to a total of $1,000,000,000. The Original Credit Agreement’s maturity was on June 27, 2022 and provided for a one-year extension option at our discretion, subject to customary conditions.

In advance of expiration of the Original Credit Agreement, during the fourth quarter of 2021, we entered into the Third Amended and Restated credit agreement (the “Credit Agreement”) to replace the Original Credit Agreement. The Credit Agreement decreased the aggregate commitment of the lenders under the Original Credit Agreement to $500,000,000 comprised of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000, extends the maturity of the Revolving Line of Credit to November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026.

Based on our leverage at December 31, 2021, the Revolving Line of Credit provides for interest annually at LIBOR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at LIBOR plus 135 points.

At December 31, 2021 and 2020, we were in compliance with all covenants. Financial covenants contained in the 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 value 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.

Interest Rate Swap Agreements. In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. During the three months ended December 31, 2021, we recorded $172,000 decrease in fair value of Interest Rate Swaps.

As of December 31, 2021, the terms of our Interest Rate Swaps are as follows (dollar amounts in thousands):

					Notional
Date Entered	Maturity Date	Swap Rate	Rate Index		Amount		Fair Value
November 2021	November 19, 2025	2.56%	1-month LIBOR	$	50,000	$	(38)
November 2021	November 19, 2026	2.69%	1-month LIBOR		50,000		(134)
				$	100,000	$	(172)

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.85% to 5.03%. The senior unsecured notes mature between 2024 and 2032. The following table sets forth information regarding debt obligations by component as of December 31, 2021 and 2020 (dollar amounts in thousands):

		At December 31, 2021				At December 31, 2020
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit (2)	1.36%	$	110,900	$	289,100	$	89,900	$	510,100
Term loans, net of debt issue costs	2.63%		99,363		—		n/a		n/a
Senior unsecured notes, net of debt issue costs (3)	4.35%		512,456		—		559,482		—
Total	3.65%	$	722,719	$	289,100	$	649,382	$	510,100

(1) Represents weighted average of interest rate as of December 31, 2021.

(2) Subsequent to December 31, 2021, we borrowed $22,000 under our Revolving Line of Credit. Accordingly, we have $132,900 outstanding and $267,100 available for borrowing under our Revolving Line of Credit.

(3) Subsequent to December 31, 2021, we paid $7,000 under our senior unsecured notes, accordingly we have $505,456 outstanding, net of debt issue costs, under our senior unsecured notes.

Our borrowings and repayments for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):

	Year Ended December 31,
	2021						2020				2019
Debt Obligations		Borrowings			Repayments		Borrowings		Repayments			Borrowings			Repayments
Revolving line of credit	$	204,400	(1)	$	(183,400)		$	24,000	$	(28,000)	$	107,900		$	(126,000)
Term loans		100,000			—			n/a		n/a		n/a			n/a
Senior unsecured notes		—			(47,160)	(2)		—		(40,160)		100,000	(3)		(33,667)
Total	$	304,400		$	(230,560)		$	24,000	$	(68,160)	$	207,900		$	(159,667)

(1) Subsequent to December 31, 2021, we borrowed $22,000 under our Revolving Line of Credit. Accordingly, we have $132,900 outstanding and $267,100 available for borrowing under our Revolving Line of Credit.

(2) Subsequent to December 31, 2021, we paid $7,000 under our senior unsecured notes, accordingly we have $505,456 outstanding, net of debt issue costs, under our senior unsecured notes.

(3) During the fourth quarter of 2019, we sold $100,000 senior unsecured notes to a group of institutional investors, which included Prudential, in a private placement transaction. The notes bear interest at an annual rate of 3.85%, have scheduled principal payments and mature on October 20, 2031.

Scheduled Principal Payments. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2021, and excludes the effects of interest and debt issue costs (in thousands):

	Total			2022			2023		2024		2025			2026		Thereafter
Revolving line of credit	$	110,900	(1)	$	—		$	—	$	—	$	110,900	(1)	$	—	$	—
Term loans		100,000			—			—		—		50,000			50,000		—
Senior unsecured notes		512,980	(2)		48,160	(2)		49,160		49,160		49,500			51,500		265,500
	$	723,880		$	48,160		$	49,160	$	49,160	$	210,400		$	101,500	$	265,500

(1) Subsequent to December 31, 2021, we borrowed $22,000 under our unsecured revolving line of credit. Accordingly, we have $132,900 outstanding and $267,100 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2021, we paid $7,000 under our senior unsecured notes, accordingly we have $505,456 outstanding, net of debt issue costs, under our senior unsecured notes.