3. Notes Payable, Unsecured Notes and Credit Facility

The Company’s mortgage notes payable, unsecured notes, Credit Facility, and Cancelled Credit Facility as of December 31, 2011 and December 31, 2010 are summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of December 31, 2011 and 2010, as shown in the Consolidated Balance Sheets (dollars in thousands) (see Note 7, “Real Estate Disposition Activities”).


	12-31-11		12-31-10

Fixed rate unsecured notes ⁽¹⁾	$	1,556,001	$	1,595,901
Variable rate unsecured notes ⁽¹⁾		75,000		225,000
Fixed rate mortgage notes payable - conventional and tax-exempt ⁽²⁾		1,528,783		1,651,135
Variable rate mortgage notes payable - conventional and tax-exempt		473,341		596,381


Total notes payable and unsecured notes		3,633,125		4,068,417

Credit Facility and Cancelled Credit Facility		—		—


Total mortgage notes payable, unsecured notes and Credit Facility	$	3,633,125	$	4,068,417

(1)	Balances at December 31, 2011 and December 31, 2010 exclude $1,802 and $2,269 respectively of debt discount, and $11 and $1,509, respectively for basis adjustments, as reflected in unsecured notes on the Company’s Consolidated Balance Sheets.

(2)	Balance at December 31, 2011 includes $962 of debt premium as reflected in mortgage notes payable on the Company’s Consolidated Balance Sheets.

The following debt activity occurred during the year ended December 31, 2011:

•

In March 2011, the Company repaid a variable rate secured mortgage note in the amount of $28,785,000 in accordance with its scheduled maturity date.

•

As part of an asset exchange in April 2011, the Company assumed a $55,400,000 fixed-rate mortgage loan with a 5.24% interest rate, and relinquished a $55,800,000 mortgage loan with a 5.86% fixed-rate.

•

In conjunction with the acquisition of Fairfax Towers in April 2011, the Company assumed a 4.75% fixed-rate mortgage loan with an outstanding principal balance of $44,044,000 that matures in August 2015.

•

In April 2011, the Company repaid all amounts due under a $93,440,000 variable-rate, tax-exempt bond financing using the original issue proceeds which were held in escrow.

•

In August 2011, the Company repaid a 7.25% fixed rate secured mortgage note in the amount of $7,191,000 at par in advance of its October 2011 scheduled maturity date.

•

In September 2011, the Company repaid $189,900,000 principal amount of our unsecured notes in accordance with their scheduled maturity. The notes had an all-in interest rate of 6.67%.

•

In October 2011, the Company repaid a 5.88% fixed rate secured mortgage note in the amount of $54,584,000 in advance of its January 2019 scheduled maturity. As part of this transaction, the Company incurred charges of $1,940,000 for a prepayment penalty and the write off of deferred financing fees which was recognized as loss on early retirement of debt.

•

In November 2011, the Company repaid a 4.95% fixed rate secured mortgage note in the amount of $94,572,000 in advance of its April 2013 scheduled maturity date. As part of this transaction, the Company incurred a charge of $3,880,000 for a prepayment penalty and the write off of deferred financing fees which was recognized as loss on early retirement of debt.

In 2012, the Company repaid an unsecured note and a secured note. See Note 14, “Subsequent Events” for further discussion.

In September 2011, the Company entered into the Credit Facility, which has an available borrowing capacity of $750,000,000 and a 4-year term, plus a one year extension option. The Company may elect to expand the facility to $1,300,000,000, provided that one or more banks (whether or not part of the current syndicate of banks) voluntarily agree to provide the additional commitment. No member of the syndicate of banks can prohibit the increase, which will only be effective to the extent banks from the syndicate or otherwise choose to commit to lend additional funds. The Credit Facility was entered into with a syndicate of commercial banks to whom the Company pays an annual facility fee of approximately $1,313,000 and bears interest at varying levels based on the London Interbank Offered Rate (“LIBOR”), rating levels achieved on the Company’s unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 1.075% per annum (1.37% at December 31, 2011). The stated spread over LIBOR can vary from LIBOR plus 1.00% to LIBOR plus 1.85% based on the Company’s credit ratings. In addition, the Credit Facility includes a competitive bid option, which allows banks that are part of the lender consortium to bid to make loans to the Company at a rate that is lower than the stated rate provided by the Credit Facility for up to $487,500,000. The competitive bid option may result in lower pricing than the stated rate if market conditions allow. The Company did not have any borrowings outstanding under the Credit Facility and had $52,659,000 outstanding in letters of credit that reduced the borrowing capacity as of December 31, 2011. The Credit Facility replaced the Company’s prior $1,000,000,000 variable rate unsecured credit facility (the “Cancelled Credit Facility”) which was scheduled to expire in November 2011. At December 31, 2010, there were no amounts outstanding under the Cancelled Credit Facility and $51,235,000 outstanding in letters of credit. The Company was in compliance at December 31, 2011 with certain customary financial and other covenants under the Credit Facility.

In the aggregate, secured notes payable mature at various dates from May 2012 through July 2066, and are secured by certain apartment communities and improved land parcels (with a net carrying value of $1,650,878,000 as of December 31, 2011).

As of December 31, 2011, the Company has guaranteed approximately $207,500,000 of mortgage notes payable held by wholly-owned subsidiaries; all such mortgage notes payable are consolidated for financial reporting purposes. The weighted average interest rate of the Company’s fixed rate mortgage notes payable (conventional and tax-exempt) was 5.7% at December 31, 2011 and December 31, 2010. The weighted average interest rate of the Company’s variable rate mortgage notes payable and its Credit Facility, including the effect of certain financing related fees, was 2.3% and 2.2% at December 31, 2011 and December 31, 2010, respectively.

Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at December 31, 2011 are as follows (dollars in thousands):


Year	Secured notes payments ⁽¹⁾		Secured notes maturities		Unsecured notes maturities		Stated interest rate of unsecured notes

2012	$	13,675	$	14,806	$	104,400		5.500	%
						201,601		6.125	%
						75,000		4.323	%(2)

2013		13,287		223,473		100,000		4.950	%

2014		14,098		33,100		150,000		5.375	%

2015		11,975		406,019		—		—

2016		12,605		—		250,000		5.750	%

2017		13,496		18,300		250,000		5.700	%

2018		14,330		—		—		—

2019		2,597		610,813		—		—

2020		2,768		—		250,000		6.100	%

2021		2,952		—		250,000		3.950	%

Thereafter		86,695		507,135		—		—


	$	188,478	$	1,813,646	$	1,631,001

(1)	Secured note payments are comprised of the principal pay downs for amortizing mortgage notes.

(2)	The weighted average interest rate for the swapped unsecured notes as of December 31, 2011.

The Company’s unsecured notes are redeemable at our option, in whole or in part, generally at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted at a rate equal to the yield on U.S. Treasury securities with a comparable maturity plus a spread between 25 and 45 basis points depending on the specific unsecured note, plus accrued and unpaid interest to the redemption date. The indenture under which the Company’s unsecured notes were issued contains limitations on the amount of debt the Company can incur or the amount of assets that can be used to secure other financing transactions, and other customary financial and other covenants, with which the Company was in compliance at December 31, 2011.