4.	INDEBTEDNESS

At September 30, 2012 and December 31, 2011, the Company’s indebtedness consists of the following:


Description	Payment Terms	Interest Rate	Maturity Date		September 30, 2012			December 31, 2011
Senior Unsecured Notes	Int.	4.75% - 6.30%	2013-2017	(1)		$	280,091		$	375,775
Unsecured Bank Term Loan	Int.	LIBOR + 1.90% (2)	2018				300,000			-
Unsecured Revolving Lines of Credit	Int.	LIBOR + 1.40% (3)	2016				-			135,000
Secured Mortgage Notes	Prin. and Int.	4.88% - 5.99%	2013-2019	(4)			456,401			459,668

Total						$	1,036,492		$	970,443

(1)	There are no remaining maturities of senior unsecured notes in 2012. Senior unsecured notes totaling approximately $130,091 mature in June 2013. The remaining unsecured notes mature in 2017.

(2)

Represents stated rate at September 30, 2012. As discussed below and effective October 1, 2012, the stated interest rate was reduced to LIBOR plus 1.70%. As also discussed below, the Company has entered into interest rate swap arrangements that effectively fix the interest rate under this facility. At September 30, 2012, the effective blended interest rate under the Term Loan was 3.44%. Effective October 1, 2012, the effective blended interest rate was reduced to 3.24%.

(3)	Represents stated rate at September 30, 2012. As discussed below and effective October 1, 2012, the stated rate was reduced to LIBOR plus 1.225%.

(4)	There are no maturities of secured notes in 2012. These notes mature between 2013 and 2019. In October 2012, the Company prepaid the mortgage note that matured in 2013 without penalty (see note 14).

Debt maturities

The aggregate maturities of the Company’s indebtedness are as follows:


Remainder of 2012	$	1,153
2013		186,606
2014		3,961
2015		124,205
2016		4,419	(1	)
Thereafter		716,148

	$	1,036,492

(1)	Includes outstanding balances on lines of credit totaling $0.

Debt issuances and retirements

In June 2012, the Company repaid $95,684 of senior unsecured notes upon their maturity. The stated interest rate on these notes was 5.45%.

In October 2012, the Company prepaid $53,027 of secured mortgage indebtedness at par. The indebtedness was scheduled to mature in January 2013 and the stated interest rate on the indebtedness was 5.50%. On November 7, 2012, the Company issued $250,000 of senior unsecured notes bearing interest at 3.375% and due in 2022. The Company intends to use the net proceeds from the unsecured notes to prepay $130,091 of 6.30% senior unsecured notes on December 3, 2012 and for general corporate purposes. In conjunction with the prepayment, the Company expects to recognize an extinguishment loss of approximately $4,100 related primarily to the payment of prepayment premiums and the write-off of unamortized deferred loan costs.

In January 2012, the Company entered into a $300,000 unsecured bank term loan facility provided by a syndicate of eight financial institutions (the “Term Loan”). In conjunction with the closing of the Term Loan, the Company borrowed $100,000, which was used to pay down outstanding line of credit borrowings. On May 31, 2012, the Company borrowed an additional $130,000, which was primarily used to retire the senior unsecured notes that matured in June 2012, as discussed above. On July 2, 2012, the Company borrowed the remaining available capacity of $70,000 under the Term Loan, which was used for general corporate purposes, including the repayment of secured mortgage indebtedness discussed above. Through September 30, 2012, the Term Loan carried a stated interest rate of LIBOR plus 1.90% and required the payment of unused commitment fees of 0.25% on the aggregate undrawn loan commitments through July 2, 2012. The Term Loan provides for the stated interest rate to be adjusted up or down based on changes in the credit ratings on the Company’s senior unsecured debt. The component of the interest rate based on the Company’s credit ratings ranges from 1.50% to 2.30%. In September and October 2012, the Company’s corporate and senior unsecured debt credit ratings were upgraded by the two national credit rating services which rate the Company’s debt. As a result and effective October 1, 2012, the stated interest rate under the Term Loan was reduced to LIBOR plus 1.70% reflecting the Company’s revised credit rating.

The Term Loan matures in January 2018, includes two six-month extension options, and carries other terms, including financial covenants, substantially consistent with the Syndicated Line discussed further below. As discussed in note 8, the Company entered into interest rate swap arrangements to serve as cash flow hedges of amounts expected to be outstanding under the Term Loan. The interest rate swap arrangements effectively fix the LIBOR component of the interest rate paid under the Term Loan at a blended rate of approximately 1.54%. As such, the Term Loan carried at an effective blended fixed rate of approximately 3.44%, at September 30, 2012. As a result of the reduced interest rate under the Term Loan effective October 1, 2012 discussed above, the effective blended interest rate was reduced to 3.24% (subject to any adjustment based on subsequent changes in the Company’s credit ratings).

Unsecured lines of credit

At September 30, 2012, the Company had a $300,000 syndicated unsecured revolving line of credit, which was amended in January 2012 (the “Syndicated Line”). At September 30, 2012, the Syndicated Line had a stated interest rate of LIBOR plus 1.40% (previously LIBOR plus 2.30% at December 31, 2011), was provided by a syndicate of eleven financial institutions and required the payment of annual facility fees of 0.30% (previously 0.45% at December 31, 2011) of the aggregate loan commitments. The Syndicated Line matures in January 2016 and may be extended for an additional year at the Company’s option, subject to the satisfaction of certain conditions. The Syndicated Line provides for the interest rate and facility fee rate to be adjusted up or down based on changes in the credit ratings on the Company’s senior unsecured debt. The component of the interest rate and the facility fee rate that are based on the Company’s credit ratings range from 1.00% to 1.80% and from 0.15% to 0.40%, respectively. As a result of the upgrade of the Company’s senior unsecured debt credit ratings discussed above, the stated interest rate and the facility fee rate were reduced to LIBOR plus 1.225% and 0.225%, respectively, effective October 1, 2012. The Syndicated Line also includes a competitive bid option for borrowings up to 50% of the loan commitments, which may result in interest rates for such borrowings below the stated interest rates for the Syndicated Line, depending on market conditions. The credit agreement for the Syndicated Line contains customary restrictions, representations, covenants and events of default, including minimum fixed charge coverage, minimum unsecured interest coverage, and maximum leverage ratios. The Syndicated Line also restricts the amount of capital the Company can invest in specific categories of assets, such as improved land, properties under construction, condominium properties, non-multifamily properties, debt or equity securities, notes receivable and unconsolidated affiliates. The Syndicated Line prohibits the Company from investing further capital in condominium assets, excluding its current investments in the Atlanta Condominium Project and the Austin Condominium Project, and certain mixed-use projects, as defined. At September 30, 2012, letters of credit to third parties totaling $575 had been issued for the account of the Company under this facility.

Additionally, at September 30, 2012, the Company had a $30,000 unsecured line of credit, which was also amended in January 2012 (the “Cash Management Line”). The Cash Management Line matures in January 2016, includes a one-year extension option, and carries pricing and terms, including financial covenants, substantially consistent with the Syndicated Line.

In connection with the Term Loan financing and the refinancing of the Syndicated Line and the Cash Management Line in January 2012, the Company incurred fees and expenses of approximately $5,159. In connection with the refinancing of the line of credit facilities, the Company recognized an extinguishment loss of $301 for the nine months ended September 30, 2012 related to the write-off of a portion of unamortized deferred financing costs associated with the amendment of the Syndicated Line.

Debt compliance and other

The Company’s Syndicated Line, Cash Management Line, Term Loan and senior unsecured notes contain customary restrictions, representations, covenants and events of default and require the Company to meet certain financial covenants. Debt service and fixed charge coverage covenants require the Company to maintain coverages of a minimum of 1.5 to 1.0, as defined in applicable debt arrangements. Additionally, the Company’s ratio of unencumbered adjusted property-level net operating income to unsecured interest expense may not be less than 2.0 to 1.0, as defined in the applicable debt arrangements. Leverage covenants generally require the Company to maintain calculated covenants above/below minimum/maximum thresholds. The primary leverage ratios under these arrangements include total debt to total asset value (maximum of 60%), total secured debt to total asset value (maximum of 40%) and unencumbered assets to unsecured debt (minimum of 1.5 to 1.0), as defined in the applicable debt arrangements. The Company believes it met these financial covenants at September 30, 2012.