Secured and unsecured senior debt

The following table summarizes our secured and unsecured senior debts and their respective principal maturities, as of September 30, 2013 (dollars in thousands):



	Fixed Rate/Hedged Variable Rate			Unhedged Variable Rate			Total Consolidated			Percentage of Total		Weighted Average Interest Rate at End of Period ⁽¹⁾		Weighted Average Remaining Term (in years)
Secured notes payable, net	$	589,126		$	119,527		$	708,653		24.7	%	5.47	%	2.5
Unsecured senior notes payable, net	1,048,190			—			1,048,190			36.5		4.29		9.1
$1.5 billion unsecured senior line of credit	—			14,000			14,000			0.5		1.28		5.3
2016 Unsecured Senior Bank Term Loan	350,000			150,000			500,000			17.4		1.70		2.8
2019 Unsecured Senior Bank Term Loan	600,000			—			600,000			20.9		3.30		5.3
Total debt / weighted average	$	2,587,316		$	283,527		$	2,870,843		100.0	%	3.91	%	5.5
Percentage of total debt	90		%	10		%	100		%


(1)	Represents the weighted average contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted average interest rate excludes bank fees and amortization of loan fees.

The following table summarizes our outstanding consolidated indebtedness as of September 30, 2013 (dollars in thousands):



	Stated Rate			Weighted Average Interest Rate⁽¹⁾		Maturity Date⁽²⁾		Remaining for the Period Ending December 31,
Debt	Stated Rate			Weighted Average Interest Rate⁽¹⁾		Maturity Date⁽²⁾		2013			2014			2015			2016			2017			Thereafter			Total
Secured notes payable
Greater Boston	5.26	%		5.59	%	04/01/14		$	979		$	208,683		$	—		$	—		$	—		$	—		$	209,662
Suburban Washington, D.C.	2.17			2.17		04/20/14	⁽³⁾	—			76,000			—			—			—			—			76,000
San Diego	6.05			4.88		07/01/14		24			6,458			—			—			—			—			6,482
San Diego	5.39			4.00		11/01/14		30			7,495			—			—			—			—			7,525
Seattle	6.00			6.00		11/18/14		60			240			—			—			—			—			300
Suburban Washington, D.C.	5.64			4.50		06/01/15		22			138			5,788			—			—			—			5,948
Greater Boston, San Diego, and Greater New York City	5.73			5.73		01/01/16		416			1,713			1,816			75,501			—			—			79,446
Greater Boston, San Diego, and Greater NYC	5.82			5.82		04/01/16		221			931			988			29,389			—			—			31,529
San Francisco Bay Area	6.35			6.35		08/01/16		580			2,487			2,652			126,715			—			—			132,434
San Francisco Bay Area	L+1.50			1.69		07/01/15	⁽⁴⁾	—			—			43,227			—			—			—			43,227
San Francisco Bay Area	L+1.40			1.59		06/01/16	⁽⁵⁾	—			—			—			—			—			—			—
Greater Boston	L+1.35			1.54		08/23/17	⁽⁶⁾	—			—			—			—			—			—			—
San Diego, Suburban Washington, D.C., and Seattle	7.75			7.75		04/01/20		345			1,453			1,570			1,696			1,832			108,469			115,365
San Francisco Bay Area	6.50			6.50		06/01/37		—			17			18			19			20			773			847
Average/Total	5.41	%		5.47				2,677			305,615			56,059			233,320			1,852			109,242			708,765

$1.5 billion unsecured senior line of credit	L+1.10	%	⁽⁷⁾	1.28		01/03/19		—			—			—			—			—			14,000			14,000
2016 Unsecured Senior Bank Term Loan	L+1.20	%		1.70		07/31/16		—			—			—			500,000			—			—			500,000
2019 Unsecured Senior Bank Term Loan	L+1.20	%		3.30		01/03/19		—			—			—			—			—			600,000			600,000
Unsecured senior notes payable	4.60	%		4.61		04/01/22		—			—			—			—			—			550,000			550,000
Unsecured senior notes payable	3.90	%		3.94		06/15/23		—			—			—			—			—			500,000			500,000
Average/Subtotal				3.91				2,677			305,615			56,059			733,320			1,852			1,773,242			2,872,765
Unamortized discounts				—				(146		)	(199		)	(139		)	(177		)	(184		)	(1,077		)	(1,922		)
Average/Total				3.91	%			$	2,531		$	305,416		$	55,920		$	733,143		$	1,668		$	1,772,165		$	2,870,843

Balloon payments								$	—		$	297,080		$	48,955		$	730,029		$	—		$	1,768,352		$	2,844,416
Principal amortization								2,531			8,336			6,965			3,114			1,668			3,813			26,427
Total consolidated debt								$	2,531		$	305,416		$	55,920		$	733,143		$	1,668		$	1,772,165		$	2,870,843

Fixed rate/hedged variable rate debt								$	2,471		$	229,176		$	12,693		$	583,143		$	1,668		$	1,758,165		$	2,587,316
Unhedged variable rate debt								60			76,240			43,227			150,000			—			14,000			283,527
Total consolidated debt								$	2,531		$	305,416		$	55,920		$	733,143		$	1,668		$	1,772,165		$	2,870,843


(1)	Represents the weighted average contractual interest rate as of the end of the period plus the impact of debt premiums/discounts and our interest rate swap agreements. The weighted average interest rate excludes bank fees and amortization of loan fees.


(2)	Includes any extension options that we control.


(3)	We are having discussions with the lender on an extension of the maturity date.


(4)	Secured construction loan with aggregate commitments of $55.0 million. We have two, one-year options to extend the stated maturity date to July 1, 2017, subject to certain conditions.


(5)	Secured construction loan with aggregate commitments of $33.0 million. We have two, one-year options to extend the stated maturity date to June 1, 2018, subject to certain conditions. As of September 30, 2013, we had not drawn on the loan.


(6)	Secured construction loan with aggregate commitments of $245.4 million. We have a one-year option to extend the stated maturity date to August 23, 2018, subject to certain conditions. As of September 30, 2013, we had not drawn on the loan.


(7)	In addition to the stated rate, the line of credit is subject to an annual facility fee of 0.20%.

3.90% Unsecured senior notes payable

In June 2013, we completed a $500.0 million public offering of our unsecured senior notes payable at a stated interest rate of 3.90% (“3.90% Unsecured Senior Notes”). The unsecured senior notes payable were priced at 99.712% of the principal amount with a yield to maturity of 3.94% and are due June 15, 2023. The unsecured senior notes payable are unsecured obligations of the Company and are fully and unconditionally guaranteed by Alexandria Real Estate Equities, L.P., a 100% owned subsidiary of the Company. The unsecured senior notes payable rank equally in right of payment with all other senior unsecured indebtedness. However, the unsecured senior notes payable are effectively subordinated to existing and future mortgages and other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future preferred equity and liabilities, whether secured or unsecured, of the Company’s subsidiaries, other than Alexandria Real Estate Equities, L.P. We used the net proceeds of this offering initially to prepay $150.0 million of the outstanding principal balance on our unsecured senior bank term loan due in 2016 (“2016 Unsecured Senior Bank Term Loan”), to reduce the outstanding borrowings on our unsecured senior line of credit to zero, and held the remaining proceeds in cash and cash equivalents. As a result of the $150.0 million prepayment, we recognized a loss on early extinguishment of debt related to the write-off of a portion of unamortized loan fees in June 2013, totaling $560 thousand.

Unsecured senior line of credit and unsecured senior bank term loans

On July 26, 2013, we amended our 2016 Unsecured Senior Bank Term Loan to reduce the applicable interest rate margins in respect of the loan thereunder on outstanding borrowings. We extended the maturity of this loan by one month and we expect to repay the loan over the next one to three years. In addition, on August 30, 2013, we amended our $1.5 billion unsecured senior line of credit and our unsecured senior bank term loan due in 2019 (“2019 Unsecured Senior Bank Term Loan”) to reduce the interest rate on outstanding borrowings, extend the maturity dates, and amend certain financial covenants. Also, on August 30, 2013, we amended our 2016 Unsecured Senior Bank Term Loan to conform certain financial covenants to those contained in the amended credit agreement related to our $1.5 billion unsecured senior line of credit and our 2019 Unsecured Senior Bank Term Loan. The maturity dates below reflect any available extension options that we control.

Balance at 9/30/13

Maturity Date

Applicable Rate

Facility Fee

Facility

Prior

Amended

Prior

Amended

Prior

Amended

2016 Unsecured Senior Bank Term Loan

500

million

June 2016

July 2016

L +1.75%

L +1.20%

N/A

2019 Unsecured Senior Bank Term Loan

600

million

January 2017

January 2019

L +1.50%

L +1.20%

N/A

$1.5 billion unsecured senior line of credit

million

April 2017

January 2019

L +1.20%

L +1.10%

0.25

0.20

On September 30, 2013, we paid down $100 million on our 2016 Unsecured Senior Bank Term Loan to a total outstanding balance of $500 million. During the three months ended September 30, 2013, in conjunction with the refinancing of our unsecured senior bank term loans and the partial repayment of $100 million of our 2016 Unsecured Senior Bank Term Loan, we recognized a loss on early extinguishment of debt totaling $1.4 million, due to the write-off of unamortized loan fees.

Borrowings under the unsecured senior line of credit will bear interest at a “Eurocurrency Rate” or a “Base Rate” specified in the amended unsecured line of credit agreement, plus, in either case, a specified margin (the “Applicable Margin”). The “Eurocurrency Rate” specified in the amended unsecured line of credit agreement is, as applicable, the rate per annum equal to (i) the London interbank offered rate (“LIBOR”) or a successor rate thereto as approved by the administrative agent for loans denominated in a LIBOR quoted currency (i.e., US Dollars, Euro, Sterling, or Yen), (ii) the average annual yield rates applicable to Canadian dollar banker's acceptances for loans denominated in Canadian dollars, (iii) the Bank Bill Swap Reference Bid rate for loans denominated in Australian dollars, or (iv) the rate designated with respect to the applicable alternative currency for loans denominated in a non-LIBOR quoted currency (other than Canadian or Australian dollars). The “Base Rate” specified in the amended unsecured line of credit agreement means for any day a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurocurrency Rate plus 1.00%. The Applicable Margin for LIBOR borrowings under the unsecured senior line of credit as of September 30, 2013, was 1.10%, which is based on our existing credit rating as set by certain rating agencies. As of September 30, 2013, we had $14 million in borrowings outstanding on our $1.5 billion unsecured senior line of credit. Our unsecured senior line of credit is subject to an annual facility fee of 0.20% based on the aggregate commitments outstanding.

In addition, the terms of the unsecured senior line of credit and unsecured senior bank term loan agreements, among other things, limit the ability of the Company, Alexandria Real Estate Equities, L.P., and the Company’s subsidiaries to (i) consummate a merger, or consolidate or sell all or substantially all of the Company’s assets, and (ii) incur certain secured or unsecured indebtedness. Additionally, the terms of the unsecured senior line of credit and unsecured senior bank term loan agreements include a restriction that may limit our ability to pay dividends, including distributions with respect to common stock or other equity interests, during any time a default is continuing, except to enable us to continue to qualify as a REIT for federal income tax purposes. As of September 30, 2013, we were in compliance with all such covenants and there were no limitations pursuant to such covenants.

The following table outlines our interest expense for the three and nine months ended September 30, 2013 and 2012 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Gross interest	$	32,959		$	33,855		$	96,668		$	99,094
Capitalized interest	(16,788		)	(16,763		)	(46,499		)	(47,854		)
Interest expense	$	16,171		$	17,092		$	50,169		$	51,240

Construction loan of unconsolidated joint venture

We have a 27.5% interest in an unconsolidated joint venture that is currently developing a building in the Longwood Medical Area of the Greater Boston market, with the construction costs funded primarily from a non-recourse secured construction loan with aggregate commitments of $213.2 million and an outstanding balance of $75.0 million as of September 30, 2013. See Note 3 for further information.