XML 83 R22.htm IDEA: XBRL DOCUMENT

Debt

9 Months Ended

Sep. 30, 2019

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. EQR guarantees the Operating Partnership’s revolving credit facility up to the maximum amount and for the full term of the facility. Weighted average interest rates noted below for the nine months ended September 30, 2019 include the effect of any derivative instruments and amortization of premiums/discounts/OCI (other comprehensive income) on debt and derivatives.

Mortgage Notes Payable

As of September 30, 2019, the Company had outstanding mortgage debt of approximately $2.0 billion.

During the nine months ended September 30, 2019, the Company:

•

Obtained $288.1 million in 3.94% fixed rate mortgage debt held in a Fannie Mae loan pool maturing on March 1, 2029;

•

Obtained $7.6 million in variable rate construction mortgage debt that is non-recourse to the Company maturing on June 25, 2022 (total commitment of $67.6 million);

•

Repaid $132.6 million of tax-exempt variable rate mortgage bonds maturing in 2032 through 2036;

•

Repaid $5.9 million of conventional floating-rate mortgage loans maturing in 2032 through 2035;

•

Repaid $500.0 million of 5.78% mortgage debt held in a Freddie Mac loan pool at par prior to the July 1, 2020 maturity date;

•

Repaid $84.5 million of 4.79% mortgage debt maturing in 2053 and incurred a prepayment penalty of $3.4 million; and

•

Repaid $4.9 million of scheduled principal repayments on various mortgage debt.

The Company recorded $2.3 million of write-offs of unamortized deferred financing costs during the nine months ended September 30, 2019 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $6.2 million of write-offs of net unamortized discounts during the nine months ended September 30, 2019 as additional interest expense related to debt extinguishment of mortgages.

As of September 30, 2019, the Company had $301.7 million of secured debt (primarily tax-exempt bonds) subject to third party credit enhancement.

As of September 30, 2019, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 28, 2061. At September 30, 2019, the interest rate range on the Company’s mortgage debt was 0.10% to 5.29%. During the nine months ended September 30, 2019, the weighted average interest rate on the Company’s mortgage debt was 3.90%.

Notes

As of September 30, 2019, the Company had outstanding unsecured notes of approximately $6.7 billion.

During the nine months ended September 30, 2019, the Company:

•

Issued $600.0 million of ten-year 3.00% unsecured notes, receiving net proceeds of approximately $597.5 million before underwriting fees, hedge termination costs and other expenses;

•

Issued $600.0 million of ten-year 2.50% unsecured notes, receiving net proceeds of approximately $597.0 million before underwriting fees and other expenses; and

•

Repaid $450.0 million of 2.375% unsecured notes at maturity. The fair value interest rate swaps matured in conjunction with the maturity of the notes that converted the fixed rate of 2.375% to a floating interest rate of 90-Day LIBOR plus 0.61%.

As of September 30, 2019, scheduled maturities for the Company’s outstanding notes were at various dates through August 1, 2047. At September 30, 2019, the interest rate range on the Company’s notes was 2.50% to 7.57%. During the nine months ended September 30, 2019, the weighted average interest rate on the Company’s notes was 4.26%.

The Company’s unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for the nine months ended September 30, 2019.

Line of Credit and Commercial Paper

The Company has a $2.0 billion unsecured revolving credit facility maturing January 10, 2022. The Company has the ability to increase available borrowings by an additional $750.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.825%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. During the nine months ended September 30, 2019, the weighted average interest rate on the revolving credit facility was 3.14%.

The Company has an unsecured commercial paper note program in the United States. The Company may borrow up to a maximum of $500.0 million under this program subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness. The notes bear interest at various floating rates with a weighted average of 2.61% for the nine months ended September 30, 2019 and a weighted average maturity of 28 days as of September 30, 2019. The weighted average amount outstanding for the nine months ended September 30, 2019 was approximately $384.7 million.

The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $500.0 million commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility as of September 30, 2019 (amounts in thousands):

	September 30, 2019
Unsecured revolving credit facility commitment	$	2,000,000
Commercial paper balance outstanding		(355,000	)
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(100,929	)
Unsecured revolving credit facility availability	$	1,544,071

Other

In 2017, the Company executed a letter of credit facility with a third party financial institution which is not backed or collateralized by borrowings on the Company’s unsecured revolving credit facility. As of September 30, 2019, there was $9.0 million in letters of credit outstanding on this facility.