Capital Markets Long Term Debt (Notes)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

On June 29, 2020, the Company amended its Consolidated Credit Agreement, which governs its unsecured revolving credit facility and its unsecured term loan facility, and its Note Purchase Agreement, which governs its private placement notes. The amendments modified certain provisions and waived the Company's obligation to comply with certain covenants under these debt agreements in light of the continuing financial and operational impacts of the COVID-19 pandemic on the Company and its tenants and borrowers. The modifications are generally effective during the covenant relief period, which is defined as the period of time beginning June 29, 2020 and ending on the earlier of (i) April 1, 2021 or (ii) the date on which the Company provides notice that it elects to terminate the covenant relief period, together with evidence that it would have been in compliance with the applicable financial covenants at the end of the most recently ended fiscal quarter even if the covenant relief period had not been in effect for such fiscal quarter.

During the covenant relief period, the initial interest rate for the revolving credit and term loan facility is LIBOR plus 1.375% and LIBOR plus 1.75%, respectively, (with a LIBOR floor of 0.50%) and the facility fee is increased to 0.375%. After the covenant relief period, the interest rates for the revolving credit and term loan facility are scheduled to return to LIBOR plus 1.00% and LIBOR plus 1.10%, respectively, (with a LIBOR floor of zero) and the facility fee will return to 0.20%. These rates are subject to changes, however, if the Company's long-term unsecured debt ratings change as defined in the agreements. During the covenant relief period, the interest rates for the private placement notes are 5.00% and 5.21%, respectively, for the Series A notes due 2024 and the Series B notes due 2026. After the covenant relief period, the interest rates for the private placement notes are scheduled to return to 4.35% and 4.56%, respectively, for the Series A notes due 2024 and the Series B notes due 2026.

The amendments permanently modified certain financial covenants and provided relief from compliance with certain financial covenants during all or a portion of the covenant relief period, as follows: (i) a new minimum liquidity financial covenant during the covenant relief period was added; (ii) compliance with the total-debt-to-total-asset-value and the maximum-unsecured-debt-to-unencumbered-asset-value financial covenants was suspended during the covenant relief period; (iii) compliance with the minimum unsecured interest coverage ratio and the minimum fixed charge ratio financial covenants was suspended for the period beginning on June 29, 2020 and ending on the earlier to occur of October 1, 2020 or the expiration or earlier termination of the covenant relief period; (iv) permanent amendments to the unsecured-debt-to-unencumbered-asset-value financial covenant to allow short-term indebtedness to be offset by unrestricted cash in the calculation and to allow unrestricted cash not otherwise offset against short term indebtedness to be counted as an unencumbered asset; and (v) permanent amendments to financial covenants to allow deferred payments to be included as recurring property revenue in these calculations. The amendments also imposed additional restrictions on the Company and its subsidiaries during the covenant relief period, including limitations on certain investments, incurrences of indebtedness, capital expenditures, payment of dividends or other distributions and stock repurchases, in each case subject to certain exceptions. In addition, the amendments require the Company to cause certain of its key subsidiaries to guarantee the Company's obligations and pledge the equity interests of such subsidiary guarantors upon the occurrence of certain events during the covenant relief period.

In connection with the amendments, $0.8 million of fees paid to third parties were expensed and included in costs associated with loan refinancing in the accompanying consolidated statements of (loss) income and comprehensive (loss) income for the three and six months ended June 30, 2020. In addition, the Company paid $2.6 million in fees to existing lenders that were capitalized in deferred financing costs and amortized as part of the effective yield. These fees consisted of $1.6 million related to the unsecured revolving credit facility and included in other assets and $1.0 million related to the term loan and private placement notes and shown as a reduction of debt.