Notes payable

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Notes payable

Notes payable. A summary of notes payable is as follows:

	2022	2021
	(in $ thousands)
3.6% Senior Notes	444,608	444,106
Other notes payable	2,398	39,385
	447,006	483,491

Included within other notes payable are $0.1 million and $1.0 million of capital lease obligations at December 31, 2022 and 2021, respectively. The entire balance of other notes payable at December 31, 2022 is due in 2023.

In November 2021, the Company completed an underwritten offering of $450 million aggregate principal amount of unsecured 3.6% Senior Notes due on November 15, 2031 (Senior Notes). The proceeds from the issuance of the Senior Notes, net of underwriting discounts and issuance costs, were $444.0 million, which were used to repay the balance of the Term Loan (see below) and for general corporate purposes. Interest on the Senior Notes is paid semi-annually in May and November at a fixed rate of 3.6% per annum. At any time prior to August 15, 2031, the Senior Notes are subject to redemption, at the Company's option, upon not less than 15 days' notice, in whole or in part, at a redemption price equal to the greater of: 100% of the principal amount of the Senior Notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest to be redeemed. The Senior Notes are the Company’s general senior unsecured obligations, are not guaranteed by any of the Company’s subsidiaries, rank equally in right of payment with the Company’s existing and future senior unsecured indebtedness, and are effectively subordinated to all liabilities of the Company’s subsidiaries and to all of the Company’s secured indebtedness to the extent of the value of the collateral securing such indebtedness.

Previously, the Company had an available $150.0 million unsecured line of credit commitment (Existing Credit Agreement) for general corporate and acquisitions purposes which was previously scheduled to expire in November 2023. In May 2020, the Company entered into an amended agreement with the lenders (First Amendment) which increased the available unsecured line of credit commitment to $200.0 million and extended the maturity of the line of credit to May 2025. In March 2021, the Company entered into a second amendment and restated credit agreement (Second Amendment) which increased the available unsecured line of credit commitment to $350 million and extended the maturity to March 2026.

In October 2021, the Company entered into a new senior unsecured credit agreement (New Credit Agreement) comprising of a $200.0 million unsecured revolving credit facility (maturing in October 2026) and a $400.0 million unsecured delayed-draw term loan commitment (364-day term) (Term Loan), with an option to increase the revolving credit facility by up to $125.0 million. Simultaneously, the Company drew $370.0 million from the Term Loan and paid off the remaining balance of its prior line of credit commitment, which was subsequently extinguished. The New Credit Agreement is guaranteed by the Company's wholly-owned subsidiaries. In November 2021, upon issuance of its Senior Notes, the Company paid off and extinguished its Term Loan.

At the Company’s election, borrowings under the New Credit Agreement will bear interest at either (a) the Base Rate plus the Applicable Margin (each as defined in the agreement) or (b) the LIBOR Rate (as defined in the agreement) plus the applicable margin. The applicable margin, based on the Company's Debt to Capitalization Ratio (as defined in the agreement), for revolving loans ranges from 0.25% to 0.625% per annum for base rate borrowings and 1.25% to 1.625% per annum for LIBOR rate borrowings. Further, a commitment fee accrues, based on the Company's debt to capitalization Ratio, ranging from 0.15% to 0.30% per annum on the average daily unused portion of the commitments. The New Credit Agreement also contains certain consolidated financial covenants which, as detailed in the agreement, limit the Company's maximum debt to total capitalization ratio and minimum consolidated net worth.

As of December 31, 2022, the remaining balance of the line of credit available for use was $197.5 million, net of an unused $2.5 million letter of credit. The Company was in compliance with all covenants as of December 31, 2022 and 2021 under the related line of credit agreements.

The Company's qualified intermediary in tax-deferred property exchanges pursuant to Section 1031 of the Internal Revenue Code (Section 1031) enters into short-term loan agreements with parties to an exchange in the ordinary course of its business. The outstanding balances pursuant to these loans, as included within other notes payable in the above table, were $2.3 million and $37.1 million as of December 31, 2022 and 2021, respectively, and are secured by cash that is included in cash and cash equivalents on the Company's consolidated balance sheet. Borrowings and repayments on these short-term loans are reflected as financing activities in the consolidated statements of cash flows.