Debt Obligations, net

As of June 30, 2012 and December 31, 2011, the Company's debt obligations were as follows ($ in thousands):



	Carrying Value as of
	June 30, 2012			December 31, 2011			Stated Interest Rates			Scheduled Maturity Date
Secured credit facilities and term loans:
2011 Tranche A-1 Facility	$	646,068		$	961,580		LIBOR + 3.75%		(1)	June 2013
2011 Tranche A-2 Facility	1,450,000			1,450,000			LIBOR + 5.75%		(1)	June 2014
2012 Tranche A-1 Facility	328,605			—			LIBOR + 4.00%		(2)	March 2016
2012 Tranche A-2 Facility	470,000			—			LIBOR + 5.75%		(2)	March 2017
Term loans collateralized by net lease assets	238,425			293,192			5.05% - 7.68%			Various through 2026
Total secured credit facilities and term loans	$	3,133,098		$	2,704,772
Unsecured credit facility:
Line of credit	$	—		$	243,650		LIBOR + 0.85%			June 2012
Unsecured notes:
5.15% senior notes	—			263,466			5.15	%		March 2012
5.50% senior notes	—			92,845			5.50	%		June 2012
LIBOR + 0.50% senior convertible notes(3)	469,166			784,750			LIBOR + 0.50%			October 2012
8.625% senior notes	501,701			501,701			8.625	%		June 2013
5.95% senior notes	448,453			448,453			5.95	%		October 2013
6.5% senior notes	67,055			67,055			6.5	%		December 2013
5.70% senior notes	200,601			200,601			5.70	%		March 2014
6.05% senior notes	105,765			105,765			6.05	%		April 2015
5.875% senior notes	261,403			261,403			5.875	%		March 2016
5.85% senior notes	99,722			99,722			5.85	%		March 2017
9.0% senior notes	275,000			—			9.0	%		June 2017
Total unsecured notes	$	2,428,866		$	2,825,761
Other debt obligations:
Other debt obligations	$	100,000		$	100,000		LIBOR + 1.5%			October 2035
Total debt obligations	$	5,661,964		$	5,874,183
Debt discounts, net(3)	(58,025		)	(36,643		)
Total debt obligations, net	$	5,603,939		$	5,837,540

Explanatory Notes:

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(1)	These loans each have a LIBOR floor of 1.25%. As of June 30, 2012, inclusive of the floors, the 2011 Tranche A-1 Facility and 2011 Tranche A-2 Facility loans incurred interest at a rate of 5.00% and 7.00%, respectively.


(2)	These loans each have a LIBOR floor of 1.25%. As of June 30, 2012, inclusive of the floors, the 2012 Tranche A-1 Facility and 2012 Tranche A-2 Facility loans incurred interest at a rate of 5.25% and 7.00% respectively.

(3)

The Company's convertible senior floating rate notes due October 2012 ("Convertible Notes") are convertible at the option of the holders into 22.2 shares per $1,000 principal amount of Convertible Notes (reflecting a conversion price of $45.05), on or after August 15, 2012, or prior to that date if certain conditions are met. None of the conversion conditions have been met as of June 30, 2012. As of June 30, 2012, the unamortized discount on these notes was $2.5 million, the net carrying amount of the liability was $466.7 million and the carrying value of the additional paid-in-capital, or equity component of the convertible notes was $34.7 million. For the three and six months ended June 30, 2012, the Company recognized interest expense on the convertible notes of $3.1 million and $8.3 million, respectively, of which $1.8 million and $4.8 million, respectively, related to the amortization of the debt discount. For the three and six months ended June 30, 2011, the Company recognized interest expense on the convertible notes of $4.5 million and $8.9 million respectively, of which $2.9 million and $5.7 million, respectively, related to the amortization of the debt discount.

Future Scheduled Maturities—As of June 30, 2012, future scheduled maturities of outstanding long-term debt obligations, net are as follows ($ in thousands)(1):



	Unsecured Debt			Secured Debt			Total
2012 (remaining six months)	$	469,166		$	—		$	469,166
2013	1,017,209			890,941			1,908,150
2014	200,601			1,382,000			1,582,601
2015	105,765			82,000			187,765
2016	261,403			123,000			384,403
Thereafter	474,722			655,157			1,129,879
Total principal maturities	$	2,528,866		$	3,133,098		$	5,661,964
Unamortized debt discounts, net	(23,826		)	(34,199		)	(58,025		)
Total long-term debt obligations, net	$	2,505,040		$	3,098,899		$	5,603,939

Explanatory Note:

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(1)	Includes minimum required amortization payments on the 2011 and 2012 Secured Credit Facilities.

2012 Secured Credit Facilities—In March 2012, the Company entered into a new $880.0 million senior secured credit agreement providing for two tranches of term loans: a $410.0 million 2012 A-1 tranche due March 2016, which bears interest at a rate of LIBOR + 4.00% (the "2012 Tranche A-1 Facility"), and a $470.0 million 2012 A-2 tranche due March 2017, which bears interest at a rate of LIBOR + 5.75% (the "2012 Tranche A-2 Facility") together the "2012 Secured Credit Facilities." The 2012 A-1 and A-2 tranches were issued at 98.0% of par and 98.5% of par, respectively, and both tranches include a LIBOR floor of 1.25%. Proceeds from the 2012 Secured Credit Facilities were used to repurchase $315.6 million aggregate principal amount of the Company's convertible notes due October 2012, to fully repay the $244.0 million balance on the Company's unsecured credit facility due June 2012, and to repay, upon maturity, $90.3 million outstanding principal balance of its 5.50% senior unsecured notes. As of June 30, 2012, remaining proceeds were included in restricted cash as they are reserved for the repayment of indebtedness.

The 2012 Secured Credit Facilities are collateralized by a first lien on a fixed pool of collateral consisting of loan, net lease, OREO and REHI assets. Proceeds from principal repayments and sales of collateral are applied to amortize the 2012 Secured Credit Facilities. Proceeds received for interest, rent, lease payments and fee income are retained by the Company. The 2012 Tranche A-1 Facility requires amortization payments of $41.0 million to be made every six months beginning December 31, 2012. After the 2012 Tranche A-1 Facility is repaid, proceeds from principal repayments and sales of collateral will be used to amortize the 2012 Tranche A-2 Facility. The Company may make optional prepayments on each tranche of term loans, subject to prepayment fees.

Through June 30, 2012, the Company has made cumulative amortization repayments of $81.4 million on the 2012 Tranche A-1 Facility, which exceeds the $41.0 million minimum amortization required to be paid by December 31, 2012, leaving $0.6 million to be paid by the next required amortization payment in June 2013. Repayments of the 2012 A-1 Tranche Facility prior to scheduled amortization dates have resulted in losses on early extinguishment of debt of $3.1 million for both the three and six months ended June 30, 2012, related to the acceleration of discounts and unamortized deferred financing fees on the portion of the facility that was repaid.

2011 Secured Credit Facilities—In March 2011, the Company entered into a $2.95 billion senior secured credit agreement providing for two tranches of term loans: a $1.50 billion 2011 A-1 tranche due June 2013, which bears interest at a rate of LIBOR + 3.75% (the "2011 Tranche A-1 Facility"), and a $1.45 billion 2011 A-2 tranche due June 2014, which bears interest at a rate of LIBOR + 5.75% (the "2011 Tranche A-2 Facility") together the "2011 Secured Credit Facilities." The 2011 A-1 and A-2 tranches were issued at 99.0% of par and 98.5% of par, respectively, and both tranches include a LIBOR floor of 1.25%.

The 2011 Secured Credit Facilities are collateralized by a first lien on a fixed pool of collateral consisting of loan, net lease, OREO and REHI assets. Proceeds from principal repayments and sales of collateral are applied to amortize the 2011 Secured Credit Facilities. Proceeds received for interest, rent, lease payments, fee income and, under certain circumstances, additional amounts funded on assets serving as collateral are retained by the Company. The 2011 Tranche A-1 Facility requires that aggregate cumulative amortization payments of not less than $200.0 million shall be made on or before December 30, 2011, not less than $450.0 million on or before June 30, 2012, not less than $750.0 million on or before December 31, 2012 and not less than $1.50 billion on or before June 28, 2013. The 2011 Tranche A-2 Facility will begin amortizing six months after the repayment in full of the 2011 Tranche A-1 Facility, such that not less than $150.0 million of cumulative amortization payments shall be made on or before the six month anniversary of repayment of the A-1 Facility, with additional amortization payments of $150.0 million due on or before each six month anniversary thereafter, with any unpaid principal amounts due at maturity in June 2014.

Through June 30, 2012, the Company has made cumulative amortization repayments of $853.9 million on the 2011 Tranche A-1 Facility, which exceeds the $750.0 million cumulative amortization required to be paid by December 31, 2012 on that facility, leaving $646.1 million to be paid by maturity in June 2013. Repayments of the 2011 A-1 Tranche Facility prior to scheduled amortization dates have resulted in losses on early extinguishment of debt of $2.1 million and $3.1 million for the three and six months ended June 30, 2012, respectively, related to the acceleration of discounts and unamortized deferred financing fees on the portion of the facility that was repaid.

Secured Term Loans—During the six months ended June 30, 2012, in conjunction with the sale of a portfolio of 12 net lease assets, the Company repaid the $50.8 million outstanding balances of its LIBOR + 4.50% secured term loans due in 2014 and terminated the related interest rate swaps associated with the loans (see Note 11).

Unsecured Credit Facility—During the six months ended June 30, 2012, the Company fully repaid the $243.7 million remaining principal balance of its LIBOR + 0.85% unsecured credit facility due June 2012. In connection with the repayments, the Company recorded a loss on early extinguishment of debt of $0.2 million.

Secured Notes—In January 2011, the Company fully redeemed the $312.3 million remaining principal balance of its 10% 2014 secured exchange notes and recorded a gain on early extinguishment of debt of $109.0 million primarily related to the recognition of the deferred gain premiums that resulted from a previous debt exchange.

Unsecured Notes—In May 2012, the Company issued $275.0 million aggregate principal of 9.0% senior unsecured notes due June 2017 that were sold at 98.012% of their principal amount. Proceeds from this transaction are reserved for the repayment of indebtedness and included in "Restricted cash" on the Company's Consolidated Balance Sheet as of June 30, 2012.

During the six months ended June 30, 2012, the Company repaid, upon maturity, the $169.7 million outstanding principal balance of its 5.15% senior unsecured notes and the $90.3 million outstanding principal balance of its 5.50% senior unsecured notes. In addition, the Company repurchased $411.9 million par value of senior unsecured notes with various maturities ranging from March 2012 to October 2012. In connection with these repurchases, the Company recorded aggregate gains on early extinguishment of debt of $0.3 million and $3.2 million, for the three and six months ended June 30, 2012, respectively.

Unencumbered/Encumbered Assets—As of June 30, 2012, the carrying value of the Company's unencumbered and encumbered assets by asset type are as follows ($ in thousands):



	As of June 30, 2012				As of December 31, 2011
	Encumbered Assets		Unencumbered Assets		Encumbered Assets		Unencumbered Assets
Loans and other lending investments, net (1)	$	1,723,459	$	634,151	$	1,780,591	$	1,153,671
Net lease assets, net	1,272,528		277,585		1,173,982		528,782
REHI, net	425,514		824,167		359,597		868,537
OREO	417,011		305,156		177,092		500,366
Other investments	69,740		357,761		37,957		419,878
Cash and other assets	—		935,940		—		590,884
Total	$	3,908,252	$	3,334,760	$	3,529,219	$	4,062,118

Explanatory Note:

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(1)	As of June 30, 2012 and December 31, 2011, the amounts presented exclude general reserves for loan losses of $56.8 million and $73.5 million, respectively.

Debt Covenants

The Company's outstanding unsecured debt securities contain corporate level covenants that include a covenant to maintain a ratio of unencumbered assets to unsecured indebtedness of at least 1.2x and a restriction on debt incurrence based upon the effect of the debt incurrence on the Company's fixed charge coverage ratio. If any of the Company's covenants is breached and not cured within applicable cure periods, the breach could result in acceleration of its debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. While the Company expects that its ability to incur new indebtedness under the fixed charge coverage ratio will be limited for the foreseeable future, it will continue to be permitted to incur indebtedness for the purpose of refinancing existing indebtedness and for other permitted purposes under the indentures.

The Company's 2012 Secured Credit Facilities and 2011 Secured Credit Facilities both contain certain covenants, including covenants relating to collateral coverage, dividend payments, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the Company is required to maintain collateral coverage of 1.25x outstanding borrowings. In addition, for so long as the Company maintains its qualification as a REIT, the 2012 Secured Credit Facilities and 2011 Secured Credit Facilities permit the Company to distribute 100% of its REIT taxable income on an annual basis. The Company may not pay common dividends if it ceases to qualify as a REIT.

The Company's 2012 Secured Credit Facilities and 2011 Secured Credit Facilities contain cross default provisions that would allow the lenders to declare an event of default and accelerate the Company's indebtedness to them if the Company fails to pay amounts due in respect of its other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing the Company's unsecured public debt securities permit the bondholders to declare an event of default and accelerate the Company's indebtedness to them if the Company's other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated.