Notes Payable and Unsecured Credit Facilities

The Company’s outstanding debt consists of the following:



	December 31,
(in thousands)	2016			2015
Notes payable:
Fixed rate mortgage loans	$	384,786		475,214
Variable rate mortgage loans	86,969		⁽¹⁾	34,154
Fixed rate unsecured public debt	892,170			1,190,403
Total notes payable	1,363,925			1,699,771
Unsecured credit facilities:
Line	15,000			—
Term Loan	263,495			164,514
Total unsecured credit facilities	278,495			164,514
Total debt outstanding	$	1,642,420		1,864,285

⁽¹⁾ Includes three mortgages, whose interest varies on a LIBOR based formula. Each of these variable rate loans have interest rate swaps in place to fix the interest rates at a range of 2.8% to 3.7%.

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, whereas, interest on unsecured public debt is payable semi-annually.

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, 2016, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

As of December 31, 2016, the key interest rates of the Company's notes payables were as follows:



		Interest Rates
	Maturing Through	Minimum	Maximum	Weighted Average Effective Rate	Weighted Average Contractual Rate
Mortgage loans	2032	3.30%	8.40%	6.00%	5.80%
Fixed rate unsecured public debt	2025	3.75%	6.00%	5.30%	4.50%

Unsecured Credit Facilities

The Company has an unsecured line of credit commitment (the "Line") and an unsecured term loan commitment (the "Term Loan") under separate credit agreements with a syndicate of banks.

The Company is required to comply with certain financial covenants as defined in the Line and Term Loan credit agreements, such as 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, 2016, management of the Company believes it is in compliance with all financial covenants for the Line and Term Loan.

The key terms of the Line and Term Loan were as follows:



	December 31, 2016
(in thousands)	Total Capacity			Remaining Capacity			Maturing Through		Variable Interest Rate ⁽⁵⁾		Fee			Weighted Average Effective Rate		Weighted Average Contractual Rate
Line ⁽⁸⁾	$	800,000	⁽¹⁾	$	779,200	⁽²⁾	5/13/2019	⁽³⁾	LIBOR plus 0.925%		0.15%		⁽⁴⁾	1.70	%	1.40	%
Term Loan ⁽⁹⁾	$	265,000		—			1/5/2022		LIBOR plus 0.95%	⁽⁶⁾	$	35	⁽⁷⁾	2.10	%	2.00	%

⁽¹⁾The Company has the ability to increase the Line through an accordion feature to $1.0 billion. See discussion below regarding expansion of Line subsequent to December 31, 2016.

⁽²⁾ Borrowing capacity is reduced by the balance of outstanding borrowings and commitments under outstanding letters of credit.

⁽³⁾Maturity is subject to two six month extensions at the Company's option.

⁽⁴⁾The commitment fee is subject to an adjustment based on the higher of the Company's corporate credit ratings from Moody's and S&P.

⁽⁵⁾ Interest rate spread is subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB.

⁽⁶⁾ Effective July 7, 2016, the interest rate on the underlying debt is LIBOR + 0.95%, with an interest rate swap in place to fix the interest on the entire balance at 2% through maturity.

⁽⁷⁾ Annual fee, in thousands.

⁽⁸⁾Weighted average contractual and effective rates for the Line are calculated based on a fully drawn Line balance.

⁽⁹⁾ Weighted average contractual and effective rates for the Term Loan are based on the fixed rate with the interest rate swap.

Scheduled principal payments and maturities on notes payable and unsecured credit facilities were as follows:



(in thousands)	December 31, 2016
Scheduled Principal Payments and Maturities by Year:	Scheduled Principal Payments		Mortgage Loan Maturities	Unsecured Maturities ⁽¹⁾		Total
2017	$	5,279	86,339	—		91,618
2018	4,829		57,358	—		62,187
2019	4,205		106,000	15,000		125,205
2020	4,636		84,411	150,000		239,047
2021	3,780		35,190	250,000		288,970
Beyond 5 Years	9,888		65,179	765,000		840,067
Unamortized debt premium/(discount) and issuance costs	—		4,662	(9,336	)	(4,674	)
Total notes payable	$	32,617	439,139	1,170,664		1,642,420

⁽¹⁾ Includes unsecured public debt and unsecured credit facilities.

The Company has $86.3 million of debt maturing over the next twelve months, which it currently intends to refinance. If market conditions change and refinancing is not an option, the Company has sufficient capacity on its Line to repay the maturing debt, all of which is in the form of non-recourse mortgage loans.

Financing - Subsequent Events

Subsequent to December 31, 2016, the Company priced a public offering of two tranches of senior unsecured notes:

•

$350.0 million of 3.6% notes due February 1, 2027, which priced at 99.741%. The Company intends to use the net proceeds in connection with the consummation of the previously announced pending merger with Equity One, Inc., including (i) to repay approximately $285.0 million in aggregate principal amount of debt of Equity One, and any related interest, fees and expenses and (ii) to pay transaction expenses related to the pending merger with Equity One. In the event that the merger agreement is not consummated, the Company will be required to redeem these notes then outstanding at a redemption price equal to 101% of the principal amount to be redeemed plus accrued and unpaid interest, if any.


•	$300.0 million of 4.4% notes due February 1, 2047, which priced at 99.110%. The Company used a portion of the net proceeds to redeem all of the outstanding shares of its 6.625% Series 6 preferred shares on February 16, 2017 and intends to use the balance to fund investment activities and for general corporate purposes.

In connection with the pending Merger, the Company has commitments to (i) amend its Line by increasing the borrowing capacity to $1.0 billion and (ii) enter a new $300.0 million term loan facility. Both of these transactions are contingent upon the consummation of the Merger and are scheduled to close simultaneously with the Merger. The Company plans to use the proceeds from the new term loan to repay existing term loans held by Equity One. The additional line capacity will accommodate the Company's increased property operations and development / redevelopment programs from the Merger.