XML 26 R13.htm IDEA: XBRL DOCUMENT v3.23.3
Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes our total indebtedness (in thousands):
September 30, 2023December 31, 2022
Secured debt:
Fixed-rate property debt due May 2025 to January 2055 (1)
$2,244,776 $1,906,151 
Variable-rate property debt— 88,500 
Total non-recourse property debt2,244,776 1,994,651 
Debt issuance costs, net of accumulated amortization(13,538)(9,221)
Total non-recourse property debt, net$2,231,238 $1,985,430 
Unsecured debt:
Term loans due December 2024 to April 2026 (2) $475,000 $800,000 
Revolving credit facility borrowings due April 2025 (3)25,750 462,000 
4.58% Notes payable due June 2027
100,000 100,000 
4.77% Notes payable due June 2029
100,000 100,000 
4.84% Notes payable due June 2032
200,000 200,000 
Total unsecured debt900,750 1,662,000 
Debt issuance costs, net of accumulated amortization(3,754)(5,801)
Total unsecured debt, net$896,996 $1,656,199 
Total indebtedness$3,128,234 $3,641,629 
(1)In the first quarter of 2023, AIR borrowed $320 million using 10-year fixed rate financing, bearing interest at 4.9%. Proceeds were used to refinance a floating rate loan and reduce borrowings by $230 million on our revolving credit facility. The stated rates on our fixed-rate property debt are between 2.7% to 5.7%.
(2)The term loans bear interest at a one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.00% and a SOFR adjustment of 10-basis points, based on our current credit rating. As of September 30, 2023, the weighted-average interest rate for our term loans before consideration of in place interest rate swaps was 6.4%. As of September 30, 2023, $350 million of our term loans are fixed via interest rate swaps at a weighted-average interest rate of 4.3%. The blended weighted-average interest rate for our $475 million term loans, after consideration of in place interest rate swaps, is 4.9%. The term loans mature on the following schedule: $125 million matures on December 15, 2024, with a one-year extension option; $150 million matures on December 15, 2025; and $200 million matures on April 14, 2026. As of September 30, 2023, the weighted-average remaining term of the term loans was 2.3 years.
(3)As of September 30, 2023, we had capacity to borrow up to $970.0 million under our revolving credit facility after consideration of undrawn letters of credit. The revolving credit facility bears interest at a one-month Term SOFR plus 0.89%, based on our current credit rating, and a SOFR adjustment of 10-basis points. As of September 30, 2023, the weighted-average interest rate for our revolving credit facility was 6.3%.
During the three months ended September 30, 2023, AIR refinanced our $325 million of term loans with fixed rate property debt to lock in rates for debt with longer maturities. The amount included full repayment of $150 million of our term loans with a maturity of December 15, 2023 and partial repayment of $175 million of term loans with a maturity of December 15, 2024. In conjunction with the prepayment, AIR accelerated recognition of $0.8 million of associated debt issuance costs, which is included in interest expense in our condensed consolidated statements of operations.
In advance of a joint venture closing during the period, AIR placed $611.4 million in new fixed-rate property debt related to nine properties, which was subsequently contributed to the Core JV. Additionally, one property with $33.0 million in fixed-rate property debt was also contributed to the Core JV, for a total of $644.4 million of debt contributed. As the Core JV is unconsolidated, this fixed-rate property debt is excluded from our condensed consolidated balance sheet as of September 30, 2023.
In April 2023, we established a secured credit facility that provides for up to $1 billion of committed property level financing, on an as needed basis. The facility has minimal upfront costs, a 15-year term, and provides AIR the opportunity to place up to 10-year non-recourse property debt financing. Pricing can be fixed rate or variable rate at AIR's choice and is based on the Fannie Mae grid. As of September 30, 2023, and after consideration of the secured credit facility, our share of cash and cash equivalents, and our share of restricted cash, total liquidity is approximately $2.1 billion.
Under our credit agreement and unsecured notes payable, we have agreed to maintain certain financial covenants, as well as other covenants customary for similar credit arrangements. The financial covenants we are required to maintain include a maximum leverage ratio of no greater than 0.60 to 1.00; a fixed charge coverage ratio of no less than 1.50 to 1.00, a maximum secured indebtedness to total assets ratio of no greater than 0.40 to 1.00, a maximum unsecured leverage ratio no greater than 0.60 to 1.00, and a minimum unsecured interest coverage ratio no less than 1.50 to 1.00.