Unsecured Debt

Essex does not have any indebtedness as all debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities up to the maximum amounts and for the full term of the facilities.

Unsecured debt consists of the following as of December 31, 2017 and 2016 ($ in thousands):



	2017			2016			Weighted Average Maturity In Years
Unsecured bonds private placement - fixed rate	$	274,427		$	314,190		3.1
Term loan - variable rate	348,545			98,189			4.1
Bonds public offering - fixed rate	2,878,737			2,834,400			6.4
Unsecured debt, net ⁽¹⁾	3,501,709			3,246,779
Lines of credit ⁽²⁾	179,000			125,000
Total unsecured debt	$	3,680,709		$	3,371,779
Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering	3.7		%	3.6		%
Weighted average interest rate on variable rate term loan	2.5		%	2.3		%
Weighted average interest rate on lines of credit	2.3		%	1.8		%


⁽¹⁾	Includes unamortized discount of $5.2 million and $0.1 million and unamortized debt issuance costs of $18.1 million and $18.1 million as of December 31, 2017 and 2016, respectively.


⁽²⁾	Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.03 billion, excludes unamortized debt issuance costs of $3.2 million and $3.3 million as of December 31, 2017 and 2016, respectively. These debt issuance costs are included in prepaid expenses and other assets on the consolidated balance sheets.

As of December 31, 2017 and 2016, the Company had $275.0 million and $315.0 million of private placement unsecured bonds outstanding at an average effective interest rate of 4.5%, for both periods.

The following is a summary of the Company’s unsecured private placement bonds as of December 31, 2017 and 2016 ($ in thousands):



	Maturity	2017		2016		Coupon Rate
Senior unsecured private placement notes	September 2017	$	—	$	40,000	4.50	%
Senior unsecured private placement notes	December 2019	75,000		75,000		4.92	%
Senior unsecured private placement notes	April 2021	100,000		100,000		4.27	%
Senior unsecured private placement notes	June 2021	50,000		50,000		4.30	%
Senior unsecured private placement notes	August 2021	50,000		50,000		4.37	%
		$	275,000	$	315,000

As of December 31, 2017 and 2016, the Company had unsecured term loans outstanding of $350.0 million and $100.0 million at an average interest rate of 2.5% and 2.3%, respectively. These loans are included in the line “Term loan - variable rate” in the table above, and as of December 31, 2017 and 2016, the carrying value, net of debt issuance costs, was $348.5 million and $98.2 million, respectively, and the term loan matures in February 2022. The Company had entered into five interest rate swap contracts, for a term of five years with a notional amount totaling $175.0 million, which will effectively convert the interest rate on $175.0 million of the term loan to a fixed rate of 2.3%. These interest rate swaps are accounted for as cash flow hedges.

In April 2017, the Company issued $350.0 million of senior unsecured notes due on May 1, 2027 with a coupon rate of 3.625% per annum and are payable on May 1 and November 1 of each year, beginning on November 1, 2017 (the "2027 Notes"). The 2027 notes were offered to investors at a price of 99.423% of par value. The 2027 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line “Bonds public offering-fixed rate” in the table above, and as of December 31, 2017, the carrying value of the 2027 Notes, net of discount and debt issuance costs was $345.2 million.

In April 2016, the Company issued $450.0 million of senior unsecured notes due on April 15, 2026 with a coupon rate of 3.375% per annum and are payable on April 15^th and October 15^th of each year, beginning October 15, 2016 (the "2026 Notes"). The 2026 Notes were offered to investors at a price of 99.386% of par value. The 2026 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line “Bonds public offering-fixed rate” in the table above, and as of December 31, 2017 and 2016, the carrying value of the 2026 Notes, net of discount and debt issuance costs was $444.4 million and $443.7 million, respectively.

In March 2015, the Company issued $500.0 million of senior unsecured notes due on April 1, 2025 with a coupon rate of 3.5% per annum and are payable on April 1^st and October 1^st of each year, beginning October 1, 2015 (the "2025 Notes"). The 2025 Notes were offered to investors at a price of 99.747% of par value. The 2025 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line “Bonds public offering-fixed rate” in the table above, and as of December 31, 2017 and 2016, the carrying value of the 2025 Notes, net of discount and debt issuance costs was $495.9 million and $495.4 million, respectively.

In April 2014, the Company assumed $900.0 million aggregate principal amount of BRE Property Inc.’s 5.500% senior notes due 2017; 5.200% senior notes due 2021; and 3.375% senior notes due 2023 (together the “BRE Notes”). These notes are included in the line "Bonds public offering-fixed rate" in the table above, and as of December 31, 2017 and 2016, the carrying value of the BRE Notes, plus unamortized premium was $603.2 million and $907.1 million, respectively. In March 2017, the Company paid off $300.0 million of 5.500% senior notes, at maturity.

In April 2014, the Company issued $400.0 million of senior unsecured notes due on May 1, 2024 with a coupon rate of 3.875% per annum and are payable on May 1^st and November 1^st of each year, beginning November 1, 2014 (the "2024 Notes"). The 2024 Notes were offered to investors at a price of 99.234% of par value. The 2024 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line "Bonds public offering-fixed rate" in the table above, and as of December 31, 2017 and 2016, the carrying value of the 2024 Notes, net of discount and debt issuance costs was $395.8 million and $395.1 million, respectively.

In April 2013, the Company issued $300.0 million of senior unsecured notes due on May 1, 2023 with a coupon rate of 3.25% per annum and are payable on May 1^st and November 1^st of each year, beginning November 1, 2013 (the "2023 Notes"). The 2023 Notes were offered to investors at a price of 99.152% of par value. The 2023 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line “Bonds public offering-fixed rate” in the table above, and as of December 31, 2017 and 2016, the carrying value of the 2023 Notes, net of discount and debt issuance costs was $297.0 million and $296.5 million, respectively.

During the third quarter of 2012, the Company issued $300.0 million of senior unsecured notes due August 2022 with a coupon rate of 3.625% per annum and are payable on February 15th and August 15th of each year, beginning February 15, 2013 (the "2022 Notes"). The 2022 Notes were offered to investors at a price of 98.99% of par value. The 2022 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are fully and unconditionally guaranteed by Essex Property Trust, Inc. These bonds are included in the line "Bonds public offering-fixed rate" in the table above, and as of December 31, 2017 and 2016, the carrying value of the 2022 Notes, net of unamortized discount and debt issuance costs was $297.2 million and $296.6 million, respectively.

The following is a summary of the Company’s senior unsecured notes as of December 31, 2017 and 2016 ($ in thousands):



	Maturity	2017		2016		Coupon Rate
Senior notes	March 2017	$	—	$	300,000	5.500	%
Senior notes	March 2021	300,000		300,000		5.200	%
Senior notes	August 2022	300,000		300,000		3.625	%
Senior notes	January 2023	300,000		300,000		3.375	%
Senior notes	May 2023	300,000		300,000		3.250	%
Senior notes	May 2024	400,000		400,000		3.875	%
Senior notes	April 2025	500,000		500,000		3.500	%
Senior notes	April 2026	450,000		450,000		3.375	%
Senior notes	May 2027	350,000		—		3.625	%
		$	2,900,000	$	2,850,000

The aggregate scheduled principal payments of unsecured debt payable, excluding lines of credit, at December 31, 2017 are as follows ($ in thousands):



2018	$	—
2019	75,000
2020	—
2021⁽¹⁾	500,000
2022	650,000
Thereafter	2,300,000
	$	3,525,000


⁽¹⁾	Amount does not include $179.0 million outstanding on the Company's lines of credit as of December 31, 2017, that becomes due in December 2021 in accordance with the January 2018 amendment.

As of December 31, 2017, the Company’s $1.0 billion credit facility had an interest rate of LIBOR plus 0.90%, which was based on a tiered rate structure tied to the Company’s corporate ratings. The Company’s $1.0 billion credit facility was scheduled to mature in December 2020 with one 18-month extension, exercisable at the Company’s option. As of December 31, 2017 and 2016, the balance of the $1.0 billion credit facility was $179.0 million and $125.0 million, respectively. In January 2018, the Company amended the $1.0 billion credit facility such that the line's capacity was increased to $1.2 billion and the scheduled maturity date was extended to December 2021, with one-18 month extension, exercisable at the Company's option. The underlying interest rate is based on a tiered rate structure tied to the Company's corporate ratings and is at LIBOR plus 0.875%. As of December 31, 2017, the Company’s $25.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.90%, which was based on a tiered rate structure tied to the Company’s credit ratings. The $25.0 million credit facility was scheduled to mature in January 2018. As of December 31, 2017 and 2016, there was a zero balance outstanding on this unsecured line. In January 2018, the Company amended the $25.0 million credit facility such that the line's capacity was increased to $35.0 million and the scheduled maturity date was extended to January 2020. The underlying interest rate on the amended line is based on a tiered rate structure tied to the Company's corporate ratings and is at LIBOR plus 0.875%.

The Company’s unsecured lines of credit and unsecured debt agreements contain debt covenants related to limitations on indebtedness and liabilities, and maintenance of minimum levels of consolidated earnings before depreciation, interest and amortization. The Company was in compliance with the debt covenants as of December 31, 2017 and 2016.