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Secured and Unsecured Debt of the Operating Partnership
 9 Months Ended
Sep. 30, 2021
Kilroy Realty L.P. [Member]  
Debt Instrument [Line Items]  
Secured and Unsecured Debt of the Operating Partnership Secured and Unsecured Debt of the Operating Partnership
The Company generally guarantees all of the Operating Partnership’s unsecured debt obligations including the unsecured revolving credit facility and all of the unsecured senior notes.

Unsecured Revolving Credit Facility

In April 2021, the Operating Partnership amended and restated the terms of its unsecured revolving credit facility. The amendment and restatement increased the size of the unsecured revolving credit facility from $750.0 million to $1.1 billion, reduced the borrowing costs, extended the maturity date of the unsecured revolving credit facility to July 2025, with two six-month extension options, and added a sustainability-linked pricing component whereby the interest rate is lowered by 0.01% if certain sustainability performance targets are met. The LIBOR replacement provisions of the unsecured revolving credit facility permit the use of rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York.

The following table summarizes the balance and terms of our unsecured revolving credit facility as of September 30, 2021 and December 31, 2020:
September 30, 2021December 31, 2020
(in thousands)
Outstanding borrowings$— $— 
Remaining borrowing capacity
1,100,000 750,000 
Total borrowing capacity (1)
$1,100,000 $750,000 
Interest rate (2)
0.98 %1.14 %
Facility fee-annual rate (3)
0.200%
Maturity dateJuly 2025July 2022
________________________
(1)We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $500.0 million and $600.0 million as of September 30, 2021 and December 31, 2020, respectively, under an accordion feature under the terms of the unsecured revolving credit facility.
(2)Our unsecured revolving credit facility interest rate was calculated based on the contractual rate of LIBOR plus 0.900% and LIBOR plus 1.000% as of September 30, 2021 and December 31, 2020, respectively.
(3)Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of September 30, 2021 and December 31, 2020, $7.8 million and $2.1 million of unamortized deferred financing costs, respectively, which are included in prepaid expenses and other assets, net on our consolidated balance sheets, remained to be amortized through the respective maturity dates presented of our unsecured revolving credit facility.

The Company intends to borrow under the unsecured revolving credit facility from time to time for general corporate purposes, to finance development and redevelopment expenditures, to fund potential acquisitions and to potentially repay long-term debt and to supplement cash balances given uncertainties and volatility in market conditions.

Debt Covenants and Restrictions

The unsecured revolving credit facility, the unsecured senior notes, the Series A and B Notes due 2026, Series A and B Notes due 2027 and 2029, Notes due 2031 and certain other secured debt arrangements contain covenants and restrictions requiring us to meet certain financial ratios and reporting requirements. Some of the more restrictive financial covenants include a maximum ratio of total debt to total asset value, a minimum fixed-charge coverage ratio, a minimum unsecured debt ratio and a minimum unencumbered asset pool debt service coverage ratio. Noncompliance with one or more of the covenants and restrictions could result in the full principal balance of the associated debt becoming immediately due and payable. We believe we were in compliance with all of our debt covenants as of September 30, 2021.
Debt Maturities

The following table summarizes the stated debt maturities and scheduled amortization payments as of September 30, 2021:
Year
(in thousands)
Remaining 2021$1,356 
20225,554 
2023 (1)
305,775 
2024431,006 
2025406,246 
2026401,316 
Thereafter2,399,125 
Total aggregate principal value (1)(2)
$3,950,378 
________________________ 
(1)Excludes the $450.0 million of 12-year, 2.65% green unsecured senior notes issued in October 2021 and the early redemption of the $300.0 million of 3.80% unsecured senior notes in October 2021. Refer to Note 17 “Subsequent Events” for additional information.
(2)Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2021: $20.0 million of unamortized deferred financing costs for the unsecured senior notes and secured debt and $7.5 million of unamortized discounts for the unsecured senior notes.

Capitalized Interest and Loan Fees

The following table sets forth gross interest expense, including debt discount and deferred financing cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2021 and 2020. The interest expense capitalized was recorded as a cost of development and increased the carrying value of undeveloped land and construction in progress.
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands)
Gross interest expense$39,552 $38,807 $118,257 $111,069 
Capitalized interest and deferred financing costs (23,447)(19,339)(58,428)(61,273)
Interest expense$16,105 $19,468 $59,829 $49,796