Debt

New Senior Credit Facility

As discussed in Note 20, in January 2014, we entered into the Second Amended and Restated Credit Agreement to increase the maximum aggregate principal amount from $625.0 million to $1.25 billion and drew down $765.0 million to repay the Prior Senior Credit Facility and Unsecured Term Loan discussed below.

Prior Senior Credit Facility

In February 2012, we amended and restated our existing credit agreement, or the Amended and Restated Credit Agreement, to increase the maximum aggregate principal amount from $450.0 million to $625.0 million, which was comprised of a $450.0 million Revolver and a $175.0 million Term Loan Facility. The Prior Senior Credit Facility was scheduled to mature in December 2014, and we had the ability to extend it by one year at our option, subject to the conditions provided in the Amended and Restated Credit Agreement. The Prior Senior Credit Facility also permitted (i) up to $150.0 million to be borrowed in certain currencies other than the U.S. dollar, (ii) swing line loans of up to $35.0 million, and (iii) the issuance of letters of credit in an aggregate amount not to exceed $50.0 million.

The Prior Senior Credit Facility provided for an annual interest rate, at our election, of either (i) the Eurocurrency Rate or (ii) the Base Rate, in each case plus the Applicable Rate (each as defined in the Amended and Restated Credit Agreement). Prior to us obtaining an Investment Grade Debt Rating (as defined in the Amended and Restated Credit Agreement), the Applicable Rate on Eurocurrency Rate loans and letters of credit ranged from 1.75% to 2.50% (based on LIBOR) and the Applicable Rate on Base Rate loans ranged from 0.75% to1.50% (based on the “prime rate,” defined in the Amended and Restated Credit Agreement as a rate of interest set by the Bank of America based upon various factors including Bank of America’s costs and desired returns). If an Investment Grade Debt Rating were obtained, the Applicable Rate on Eurocurrency Rate loans and letters of credit ranged from 1.10% to 2.00% (based on LIBOR) and the Applicable Rate on Base Rate loans ranged from 0.10% to 1.00% (based on the “prime rate”). Swing line loans will bear interest at the Base Rate plus the Applicable Rate then in effect. In addition, we paid a quarterly fee ranging from 0.30% to 0.40% of the unused portion of the line of credit, depending on our leverage ratio. In connection with the amendments of the credit agreement in July 2013, we incurred costs of $7.0 million, which were being amortized over the remaining term of the facility.

Availability under the Prior Senior Credit Facility was dependent upon a number of factors, including the Unencumbered Property NOI, the Unencumbered Management EBITDA and the Total Unsecured Outstanding Indebtedness (each as defined in the Amended and Restated Credit Agreement). As discussed below, on July 31, 2013, we used the proceeds from the Unsecured Term Loan (as defined below) to repay the $250.0 million outstanding balance on the Revolver on that date. At December 31, 2013 and 2012, availability under the Prior Senior Credit Facility was $925.0 million and $625.0 million, respectively, of which we had drawn $275.0 million and $253.0 million, respectively, including $175.0 million under the Term Loan, which we drew down in connection with the CPA^®:15 Merger. At December 31, 2013 and 2012, we were required to pay interest on the Prior Senior Credit Facility at an annual interest rate consisting of LIBOR plus 1.75% and LIBOR plus 2.00%, respectively. In addition, as of December 31, 2013, our lenders had issued letters of credit totaling $3.2 million on our behalf in connection with certain contractual obligations, which reduce amounts that may be drawn under the Revolver.

We were required to ensure that the total Restricted Payments (as defined in the Amended and Restated Credit Agreement) made in the current quarter, when added to the total for the three preceding fiscal quarters, did not exceed the greater of (i) 95% of Adjusted Funds from Operations (as defined in the Amended and Restated Credit Agreement) and (ii) the amount of Restricted Payments required in order for us to maintain our REIT status. Restricted Payments included quarterly dividends and the total amount of shares repurchased by us, if any, in excess of $50.0 million per year. In addition to placing limitations on dividend distributions and share repurchases, the Amended and Restated Credit Agreement stipulated certain financial covenants. We were in compliance with all of these covenants at December 31, 2013.

Unsecured Term Loan

On July 31, 2013, we entered into a new credit agreement with the lender of our Prior Senior Credit Facility, Bank of America, the Term Loan Credit Agreement, for an unsecured term loan of up to $300.0 million, which we drew down in full on that date primarily to repay the $250.0 million that was then outstanding on the Revolver. We incurred costs of $1.5 million to obtain the Unsecured Term Loan, which were being amortized over the term of the loan. The Term Loan Credit Agreement had substantially the same terms as the Amended and Restated Credit Agreement.

The Unsecured Term Loan was scheduled to mature in July 2014, subject to the conditions provided in the Term Loan Credit Agreement. The Unsecured Term Loan provided for an annual interest rate, at our election, of either (i) the Eurocurrency Rate or (ii) the Base Rate, in each case plus the Applicable Rate (each as defined in the Term Loan Credit Agreement). At December 31, 2013, the Applicable Rate on Eurocurrency Rate loans ranged from 1.60% to 2.35% (based on LIBOR) and the Applicable Rate on Base Rate loans ranged from 0.60% to 1.35% (based on the “prime rate,” defined in the Term Loan Credit Agreement as a rate of interest set by Bank of America based upon various factors including Bank of America’s costs and desired returns). At December 31, 2013, the outstanding balance on the Unsecured Term Loan was $300.0 million with an annual interest rate of LIBOR plus 1.60%. The Term Loan Credit agreement also stipulated certain financial covenants that were similar to those of the Prior Senior Credit Facility. We were in compliance with all of these covenants at December 31, 2013.

Non-Recourse Debt

Non-recourse debt consists of mortgage notes payable, which are collateralized by the assignment of real property and direct financing leases with an aggregate carrying value of approximately $1.9 billion and $2.0 billion at December 31, 2013 and 2012, respectively. At December 31, 2013, our mortgage notes payable bore interest at fixed annual rates ranging from 2.7% to 7.8% and variable contractual annual rates ranging from 1.3% to 7.6%, with maturity dates ranging from 2014 to 2026 at December 31, 2013.

Financing Activity During 2013 — During the year ended December 31, 2013, in connection with our acquisitions (Note 5) during that period, we obtained non-recourse mortgage loans totaling $39.1 million with a weighted-average interest rate of 3.9% and term of 9.5 years.

During the year ended December 31, 2013, we also refinanced four maturing non-recourse mortgage loans totaling $48.7 million with new financing totaling $76.5 million. These new mortgage loans had a weighted-average annual interest rate and term of 5.0% and 9.3 years, respectively.

Financing Activity During 2012 — In connection with the CPA^®:15 Merger (Note 3), we assumed property level debt comprised of nine variable-rate and 58 fixed-rate non-recourse mortgage loans with fair values totaling $295.2 million and $1.1 billion, respectively, on the acquisition date and recorded an aggregate net fair market value adjustment of $14.8 million at that date. The fair market value adjustment will be amortized to interest expense over the remaining lives of the related loans using the effective interest rate method. These fixed-rate and variable-rate mortgages had weighted-average annual interest rates of 5.08% and 5.03%, respectively. The weighted-average annual interest rate for the variable-rate mortgages was calculated using the applicable interest rates on the date of the CPA^®:15 Merger.

During the year ended December 31, 2012, we also refinanced four maturing non-recourse mortgages totaling $21.2 million with new financing totaling $23.8 million. These mortgage loans had a weighted-average annual interest rate and term of 4.2% and 11.5 years, respectively.

Financing Activity During 2011 — In connection with our acquisition of three properties from CPA^®:14 in May 2011 (Note 4), we assumed two non-recourse mortgage loans with an aggregate fair value of $87.6 million (and a carrying value of $88.7 million) on the date of acquisition and recorded a net fair market value adjustment of $1.1 million. The fair market value adjustment will be amortized to interest expense over the remaining lives of the loans. These mortgage loans had a weighted-average annual fixed interest rate and remaining term of 5.8% and 8.3 years, respectively.

During the year ended December 31, 2011, we also refinanced two maturing non-recourse mortgage loans totaling $10.5 million with new financing totaling $11.9 million and obtained new financing on two unencumbered properties totaling $29.0 million. These mortgage loans had a weighted-average annual interest rate and term of 5.1% and 10.4 years, respectively. Additionally, during the year ended December 31, 2011, the Carey Storage borrowed a total of $4.6 million, inclusive of amounts attributable to the third-party’s interest of $2.8 million, with a weighted-average annual interest rate and term of 6.7% and 8.2 years, respectively.

Scheduled Debt Principal Payments

Scheduled debt principal payments during each of the next five calendar years following December 31, 2013, and thereafter are as follows (in thousands):



Years Ending December 31,	Total ^(a)
2014 ^(b)	$	835,086
2015	244,540
2016	80,208
2017	126,288
2018	208,907
Thereafter through 2026	584,669
	2,079,698
Unamortized discount	(12,288		)
Total	$	2,067,410

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(a)	Certain amounts are based on the applicable foreign currency exchange rate at December 31, 2013.

(b)

Includes $100.0 million outstanding under our Revolver, $175.0 million outstanding under our Term Loan Facility and $300.0 million outstanding under our Unsecured Term Loan at December 31, 2013, each of which was scheduled to mature at various dates in 2014 unless extended pursuant to its terms. In January 2014, we entered into the New Senior Credit Facility, and the Prior Senior Credit Facility and Unsecured Term Loan were repaid in full at that time and terminated. Also includes $216.1 million of non-recourse mortgage balloon payments that will be due in the 12 months following December 31, 2013.