Notes Payable and Unsecured Credit Facilities

The Parent Company does not have any indebtedness, but guarantees all of the unsecured debt and 17.6% of the secured debt of the Operating Partnership.

Notes Payable

Notes payable consist of mortgage loans secured by properties and unsecured public debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only and mature over various terms through 2028, whereas, interest on unsecured public debt is payable semi-annually and matures over various terms through 2021. Fixed interest rates on mortgage loans range from 5.22% to 8.40% with a weighted average rate of 6.30%. Fixed interest rates on unsecured public debt range from 4.80% to 6.00% with a weighted average rate of 5.46%. As of December 31, 2012, the Company had two variable rate mortgage loans, one in the amount of $9.0 million with a variable interest rate of LIBOR plus 160 basis points maturing on September 1, 2014 and one in the amount of $3.0 million with a variable interest rate equal to LIBOR plus 380 basis points maturing on October 1, 2014.

On January 15, 2012, the Company repaid the maturing balance of $192.4 million of 6.75% ten-year unsecured notes. The Company assumed debt, net of premiums, of $12.8 million and $17.7 million in connection with the acquisition of Grand Ridge Plaza on June 21, 2012 and Sandy Springs on December 21, 2012, respectively.

The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as the following ratios: Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

Unsecured Credit Facilities

The Company has an $800.0 million unsecured line of credit (the "Line") commitment under an agreement (the "Credit Agreement") with Wells Fargo Bank and a syndicate of other banks, which was amended on September 13, 2012 to increase the borrowing capacity by $200.0 million to a total of $800.0 million. The maturity date was extended by one year, and the Line will expire in September 2016, subject to a one-year extension at the Company's option. The amended Line bears interest at an annual rate of LIBOR plus 117.5 basis points and a facility fee of 22.5 basis points, subject to adjustment based on the higher of the Company's corporate credit ratings from Moody's and S&P. In addition, the Company has the ability to increase the Line through an accordion feature to $1.0 billion. Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit. The balance on the Line was $70.0 million and $40.0 million at December 31, 2012 and 2011, respectively. The proceeds from the Line are used to finance the acquisition and development of real estate and for general working-capital purposes.

The Company is required to comply with certain financial covenants as defined in the Credit Agreement such as Minimum Tangible Net Worth, Ratio of Indebtedness to Total Asset Value ("TAV"), Ratio of Unsecured Indebtedness to Unencumbered Asset Value, Ratio of Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, Ratio of Secured Indebtedness to TAV, Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense, and other covenants customary with this type of unsecured financing. As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for the Line.

On November 17, 2011, the Company entered into an unsecured term loan (the "Term Loan") commitment under an agreement (the "Term Loan Agreement") with Wells Fargo Bank and a syndicate of other banks, which matures on December 15, 2016. During 2012, the Company borrowed the $250.0 million available under the Term Loan and repaid $150.0 million, which resulted in the Company writing-off approximately $852,000 in loan costs and reducing the remaining commitment to $100.0 million. There was $100.0 million and no balance outstanding on the Term Loan as of December 31, 2012 and December 31, 2011, respectively. The Term Loan has a variable interest rate of LIBOR plus 145 basis points subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB. In addition, the Company has the ability to increase the Term Loan up to an amount not to exceed an additional $150.0 million subject to the provisions of the Term Loan Agreement.

The Term Loan includes financial covenants relating to minimum tangible net worth, ratio of indebtedness to total asset value, ratio of unsecured indebtedness to unencumbered asset value, ratio of adjusted EBITDA to fixed charges, ratio of secured indebtedness to total asset value, and ratio of unencumbered NOI to unsecured interest expense. The Term Loan also includes customary events of default for agreements of this type (with customary grace periods, as applicable). As of December 31, 2012, management of the Company believes it is in compliance with all financial covenants for its Term Loan.

The Company’s outstanding debt at December 31, 2012 and 2011 consists of the following (in thousands):



		2012	2011
Notes payable:
Fixed rate mortgage loans	$	461,914	439,880
Variable rate mortgage loans		12,041	12,665
Fixed rate unsecured loans		1,297,936	1,489,895
Total notes payable		1,771,891	1,942,440
Unsecured credit facilities		170,000	40,000
Total	$	1,941,891	1,982,440

As of December 31, 2012, scheduled principal payments and maturities on notes payable were as follows (in thousands):



Scheduled Principal Payments and Maturities by Year:		Scheduled Principal Payments	Mortgage Loan Maturities	Unsecured Maturities ⁽¹⁾		Total
2013	$	7,872	16,319	—		24,191
2014		7,383	26,999	150,000		184,382
2015		5,746	62,435	350,000		418,181
2016		5,487	14,161	170,000		189,648
2017		4,584	84,375	400,000		488,959
Beyond 5 Years		20,021	212,743	400,000		632,764
Unamortized debt premiums (discounts), net		—	5,830	(2,064	)	3,766
Total	$	51,093	422,862	1,467,936		1,941,891

⁽¹⁾ Includes unsecured public debt and unsecured credit facilities balances outstanding at December 31, 2012.

The Company continuously monitors the capital markets and evaluates its ability to issue new debt to repay maturing debt or fund its commitments. Based upon the current capital markets, the Company's current credit ratings, and the number of high quality, unencumbered properties that it owns which could collateralize borrowings, the Company expects that it will successfully issue new secured or unsecured debt to fund its obligations.