Mortgage and Other Indebtedness

Mortgage and other indebtedness consisted of the following as of December 31, 2018 and 2017:



($ in thousands)	As of December 31, 2018
	Principal		Unamortized Net Premiums		Unamortized Debt Issuance Costs			Total
Senior Unsecured Notes—Fixed Rate
Maturing at various dates through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2018	$	550,000	$	—	$	(4,864	)	$	545,136
Unsecured Revolving Credit Facility
Matures April 2022¹; borrowing level up to $449.5 million available at December 31, 2018; interest at LIBOR + 1.15% or 3.65% at December 31, 2018	45,600		—		(3,796		)	41,804
Unsecured Term Loans
$95 million matures July 2021; interest at LIBOR + 1.30% or 3.80% at December 31, 2018; $250 million matures October 2025; interest at LIBOR + 2.00% or 4.50% at December 31, 2018	345,000		—		(2,470		)	342,530
Mortgage Notes Payable—Fixed Rate
Generally due in monthly installments of principal and interest; maturing at various dates through 2030; interest rates ranging from 3.78% to 6.78% at December 31, 2018	534,679		6,566		(584		)	540,661
Mortgage Notes Payable—Variable Rate
Due in monthly installments of principal and interest; maturing at various dates through 2025; interest at LIBOR + 1.50%-1.60%, ranging from 4.00% to 4.10% at December 31, 2018	73,491		—		(321		)	73,170
Total mortgage and other indebtedness	$	1,548,770	$	6,566	$	(12,035	)	$	1,543,301



($ in thousands)	As of December 31, 2017
	Principal		Unamortized Net Premiums		Unamortized Debt Issuance Costs			Total
Senior Unsecured Notes—Fixed Rate
Maturing at various dates through September 2027; interest rates ranging from 4.00% to 4.57% at December 31, 2017	$	550,000	$	—	$	(5,599	)	$	544,401
Unsecured Revolving Credit Facility
Matures July 2021¹; borrowing level up to $373.8 million available at December 31, 2018; interest at LIBOR + 1.35%² or 2.91% at December 31, 2017	60,100		—		(1,895		)	58,205
Unsecured Term Loans
$200 million matures July 2021; interest at LIBOR + 1.30%² or 2.86% at December 31, 2017; $200 million matures October 2022; interest at LIBOR + 1.60% or 3.16% at December 31, 2017	400,000		—		(1,759		)	398,241
Mortgage Notes Payable—Fixed Rate
Generally due in monthly installments of principal and interest; maturing at various dates through 2030; interest rates ranging from 3.78% to 6.78% at December 31, 2017	576,927		9,196		(755		)	585,368
Mortgage Notes Payable—Variable Rate
Due in monthly installments of principal and interest; maturing at various dates through 2023; interest at LIBOR + 1.60%-2.25%, ranging from 3.16% to 3.81% at December 31, 2017	113,623		—		(599		)	113,024
Total mortgage and other indebtedness	$	1,700,650	$	9,196	$	(10,607	)	$	1,699,239



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1	This presentation reflects the Company's exercise of its options to extend the maturity date for two additional periods of six months each, subject to certain conditions.
2	The interest rates on our unsecured revolving credit facility and unsecured term loan varied at certain parts of the year due to provisions in the agreement and the amendment and restatement of the agreement.

The one month LIBOR interest rate was 2.50% and 1.56% as of December 31, 2018 and 2017, respectively.

Debt Issuance Costs

Debt issuance costs are amortized on a straight-line basis over the terms of the respective loan agreements.

The accompanying consolidated statements of operations include the following amounts of amortization of debt issuance costs as a component of interest expense:



($ in thousands)	For the year ended December 31,
	2018		2017		2016
Amortization of debt issuance costs	$	3,944	$	2,534	$	4,521

Unsecured Revolving Credit Facility and Unsecured Term Loans

On April 24, 2018, the Company and Operating Partnership entered into the First Amendment (the “Amendment”) to the Fifth Amended and Restated Credit Agreement (the “Existing Credit Agreement,” and as amended by the Amendment, the “Amended Credit Agreement”), dated as of July 28, 2016, by and among the Operating Partnership, as borrower, the Company, as guarantor (pursuant to a springing guaranty, dated as of July 28, 2016), KeyBank National Association, as administrative agent, and the other lenders party thereto. The Amendment increases (i) the aggregate principal amount available under the

unsecured revolving credit facility (the “Credit Facility”) from $500 million to $600 million, (ii) the amount of the letter of credit issuances the Operating Partnership may utilize under the Credit Facility from $50 million to $60 million, and (iii) swingline loan capacity from $50 million to $60 million in same day borrowings. Under the Amended Credit Agreement, the Operating Partnership has the option to increase the Credit Facility to $1.2 billion (increased from $1 billion under the Existing Credit Agreement) upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Amended Credit Agreement, to provide such increased amounts.

The Amendment extends the scheduled maturity date of the Credit Facility from July 28, 2020 to April 22, 2022 (which maturity date may be extended for up to two additional periods of six months at the Operating Partnership’s option subject to certain conditions). Among other things, the Amendment also improves the Operating Partnership’s leverage ratio calculation by changing the definition of capitalization rate to six and one-half percent (6.5%) from six and three-fourths percent (6.75%), which increases the Operating Partnership’s total asset value as calculated under the Amended Credit Agreement

On October 25, 2018, the Operating Partnership entered into a Term Loan Agreement (the “Agreement”) with KeyBank National Association, as Administrative Agent (the “Agent”), and the other lenders party thereto, providing for an unsecured term loan facility of up to $250 million (the “Term Loan”). The Term Loan ranks pari passu with the Operating Partnership’s existing $600 million unsecured revolving credit facility and $200 million unsecured term loan facility documented in the Operating Partnership’s Fifth Amended and Restated Credit Agreement, dated as of July 28, 2016, as amended (the “Existing Credit Agreement”), and other unsecured indebtedness of the Operating Partnership.

The Term Loan has a scheduled maturity date of October 24, 2025, which maturity date may be extended for up to three additional periods of one year at the Operating Partnership’s option subject to certain conditions.

The Operating Partnership has the option to increase the Term Loan to $300 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Agreement, to provide such increased amounts. The Operating Partnership is permitted to prepay the Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

The Operating Partnership has the option to increase the borrowing availability of the Credit Facility to $1.2 billion, subject to certain conditions, including obtaining commitments from one or more lenders.

As of December 31, 2018, $45.6 million was outstanding under the Credit Facility. Additionally, we had letters of credit outstanding which totaled $3.1 million, against which no amounts were advanced as of December 31, 2018.

The amount that we may borrow under our Credit Facility is limited by the value of the assets in our unencumbered asset pool. As of December 31, 2018, the value of the assets in our unencumbered asset pool, calculated pursuant to the Credit Facility agreement, was $1.4 billion. Taking into account outstanding borrowings on the line of credit, term loans, unsecured notes and letters of credit, we had $449.5 million available under our Credit Facility for future borrowings as of December 31, 2018.

Our ability to borrow under the Credit Facility is subject to our compliance with various restrictive and financial covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales. As of December 31, 2018, we were in compliance with all such covenants.

Senior Unsecured Notes

The Operating Partnership has $550 million of senior unsecured notes maturing at various dates through September 2027 (the "Notes"). The Notes contain a number of customary financial and restrictive covenants. As of December 31, 2018, we were in compliance with all such covenants.

Mortgage Loans

Mortgage loans are secured by certain real estate and in some cases by guarantees from the Operating Partnership, and are generally due in monthly installments of interest and principal and mature over various terms through 2030.

Debt Maturities

The following table presents maturities of mortgage debt and corporate debt as of December 31, 2018:



($ in thousands)	Scheduled Principal Payments		Term Maturities		Total
2019	$	5,034	$	—	$	5,034
2020	5,396		20,700		26,096
2021	4,627		254,875		259,502
2022	1,113		250,808		251,921
2023	806		276,940		277,746
Thereafter	6,430		722,041		728,471
	$	23,406	$	1,525,364	$	1,548,770
Unamortized net debt premiums and issuance costs, net					(5,469		)
Total					$	1,543,301

Other Debt Activity

For the year ended December 31, 2018, we had total new borrowings of $399.5 million and total repayments of $551.4 million. The components of this activity were as follows:


•	We closed on the new $250.0 million term loan and retired an existing $200.0 million 5-year term loan and paid down $50.0 million on our 7-year term loan;


•	We retired the $77.0 million in loans that were secured by our Perimeter Woods, Killingly Commons, Fishers Station, and Whitehall Pike operating properties through draws on our Credit Facility;


•	We borrowed $22.0 million on the Credit Facility to redeem our partners' interest in the Territory joint venture;


•	We used the $89.0 million of net proceeds from the formation of the TH Real Estate joint venture to pay down the Credit Facility;


•	We used the $118.0 million net proceeds from the sale of six operating properties to pay down the Credit Facility; and


•	We made scheduled principal payments on indebtedness during the year totaling $5.3 million.

The amount of interest capitalized in 2018, 2017, and 2016 was $1.8 million, $3.1 million, and $4.1 million, respectively.

Fair Value of Fixed and Variable Rate Debt

As of December 31, 2018, the estimated fair value and book value of our fixed rate debt was $1.1 billion. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 4.08% to 4.54%. As of December 31, 2018, the estimated fair value of variable rate debt was $466.3 million compared to the book value of $464.1 million. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 3.65% to 4.55%.