Debt and Lines of Credit

9 Months Ended

Sep. 30, 2014

(6) Debt and Lines of Credit

The Company does not have indebtedness as debt is incurred by the Operating Partnership. The Company guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of such debt. In April 2014, the Company, through its Operating Partnership, assumed $900.0 million aggregate principal amount of BRE senior notes and $711.3 million principal balance mortgage notes payable with remaining loan terms ranging from one to seven years and a 3.3% weighted average interest rate. The Company recorded the debt assumed at its fair value in accordance with the authoritative guidance for accounting for a business combination. As a result, a premium of $124.5 million was recorded to increase the carrying value of the debt, which is being amortized as a reduction of interest expense over the term of the related debt using the effective interest method.

In August 2014, the Company acquired a 220 unit apartment community located in Bellevue, Washington with cash and the assumption of the mortgage note securing the community with a principal balance of $21.5 million with a remaining term to maturity of ten years and a fixed interest rate of 5.5%. The recording of the mortgage note at fair value upon assumption resulted in a premium of $2.1 million which is being amortized as a reduction in interest expense over the term of the debt using the effective interest method.

Debt and lines of credit consist of the following (in thousands):

	September 30, 2014			December 31, 2013			Weighted Average Maturity In Years

Bonds private placement - fixed rate	$	465,000		$	465,000			4.5
Term loan - variable rate		350,000			350,000			2.4
Unsecured Bonds - fixed rate		1,930,487			595,023			7.3
Unsecured debt		2,745,487			1,410,023
Mortgage notes		2,258,010			1,404,080			5.8
Lines of credit		222,628			219,421			4.5
Total debt (1)	$	5,226,125		$	3,033,524

Weighted average interest rate on fixed rate unsecured bonds		3.6	%		4.0	%
Weighted average interest rate on variable rate term loan		2.4	%		2.5	%
Weighted average interest rate on line of credit		1.7	%		2.2	%
Weighted average interest rate on mortgage notes		4.6	%		4.7	%

(1)	Includes total unamortized premium of $118,940 and $6,553 as of September 30, 2014 and December 31, 2013, respectively.

The aggregate scheduled principal payments of the Company’s outstanding debt as of September 30, 2014 are as follows (excluding lines of credit):

Remaining in 2014	$	7,388
2015		94,580
2016		391,481
2017		688,683
2018		320,080
Thereafter		3,382,345
	$	4,884,557

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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