INVESTMENT DEBT

Investment debt at September 30, 2015 and December 31, 2014 consists of the following:



(Dollars in millions)		Carrying Amount of Investment Debt as of ⁽¹⁾
Investment Debt by Product Type	Region	September 30, 2015		December 31, 2014
Mortgage debt
Multifamily⁽¹⁾	Western U.S.	$	824.7	$	565.5
Commercial	Western U.S.	256.6		131.0
Hotel	Western U.S	39.5		37.2
Multifamily⁽¹⁾	Japan	—		242.9
Commercial	Japan	2.1		2.1
Commercial⁽¹⁾⁽²⁾	Ireland	391.5		412.5
Multifamily ⁽¹⁾⁽³⁾	Ireland	192.6		133.6
Residential and Other⁽¹⁾⁽⁵⁾	Ireland	4.0		29.0
Hotel	Ireland	80.5		72.9
Residential and Other⁽⁷⁾	Spain	3.5		—
Commercial⁽¹⁾⁽⁴⁾	United Kingdom	1,054.7		569.2
Total mortgage debt		2,849.7		2,195.9

Unsecured⁽⁶⁾	United Kingdom	446.9		—
Investment debt		$	3,296.6	$	2,195.9

⁽¹⁾The investment debt payable balances include unamortized debt premiums. Debt premiums represent the excess of the fair value of debt over the principal value of debt assumed in various acquisitions and are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method. The unamortized loan premium as of September 30, 2015 and December 31, 2014 was $1.9 million and $15.4 million.

⁽²⁾Includes $295.1 million and $323.8 million of investment debt on properties that were acquired and held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

⁽³⁾Includes $53.0 million and $40.3 million of investment debt on properties that were acquired and held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

⁽⁴⁾Includes $969.4 million and $483.0 million of investment debt on properties that were acquired and held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

⁽⁵⁾Includes $0.0 million and $14.6 million of investment debt on properties that were acquired and held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

⁽⁶⁾Includes $446.9 million and $0.0 million of unsecured debt held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

⁽⁷⁾Includes $3.5 million and $0.0 million of investment debt held by KWE as of September 30, 2015 and December 31, 2014, respectively. Kennedy Wilson owns approximately 17.7% of the total issued share capital of KWE as of September 30, 2015.

The investment debt had a weighted average interest rate of 3.16% and 3.03% per annum at September 30, 2015 and December 31, 2014, respectively. As of September 30, 2015, 63% of KW Group's investment level debt is fixed rate, 19% is floating rate with interest caps and 18% is floating rate without interest caps, compared to 43% fixed rate, 38% floating rate with interest caps and 19% floating rate without interest caps, as of December 31, 2014.

In addition, during the second quarter of 2015, KWE completed its inaugural bond offering of approximately $454.0 million (based on September 30, 2015 rates) (£300 million) in 3.95% fixed-rate senior unsecured bonds due 2022. The bonds were issued at a discount and have a carrying value of $446.9 million at September 30, 2015. KWE effectively reduced the interest rate to 3.35% as a result of it entering into swap arrangements to convert 50% of the proceeds into Euros.

The trust deed that governs the bonds contain various restrictive covenants for KWE, including, among others, limitations on KWE’s and its material subsidiaries’ ability to provide certain negative pledges. The trust deed limits the ability of KWE and its subsidiaries to incur additional indebtedness if, on the date of such incurrence and after giving effect to the incurrence of the new indebtedness, (1) KWE’s consolidated net indebtedness (as defined in the trust deed) would exceed 60% of KWE’s total assets (as calculated pursuant to the terms of the trust deed); and (2) KWE’s consolidated secured indebtedness (as defined in the trust deed) would exceed 50% of KWE’s total assets (as calculated pursuant to the terms of the trust deed). The trust deed also requires KWE, as of each reporting date, to maintain an interest coverage ratio (as defined in the trust deed) of at least 1.50 to 1.00 and have unencumbered assets of no less than 125% of its unsecured indebtedness (as defined in the trust deed). As of September 30, 2015, KWE was in compliance with these covenants.

In August 2014, KWE entered into a three-year unsecured floating rate revolving debt facility ("KWE Facility") with Bank of America Merrill Lynch, Deutsche Bank, and J.P. Morgan Chase of approximately $340.5 million (£225 million) based on rates as of September 30, 2015. During the nine months ended September 30, 2015, KWE drew $55.7 million and repaid $56.0 million on its unsecured credit facility to fund acquisitions. The maximum amount drawn on the unsecured credit facility at any one point during the nine months ended September 30, 2015 was $56.0 million. The difference in amounts is based on different exchange rates at the time of the initial draw-downs and subsequent repayment. As of September 30, 2015, the unsecured credit facility was undrawn and $340.5 million (£225 million) based on rates as of September 30, 2015 was still available.

During the nine months ended September 30, 2015, five acquisitions were partially financed with mortgages, five existing investments were partially financed with mortgages, three existing mortgages were consolidated and eleven existing investments with existing mortgages were refinanced. See note 4 for more detail on the acquisitions and the investment debt associated with them.

As part of the sale of KW Group's Japanese multifamily portfolio and the payoff of the portfolio's investment debt, KW Group recognized a prepayment penalty of $7.1 million through interest expense during the quarter ended June 30, 2015.

The aggregate maturities of investment debt subsequent to September 30, 2015 are as follows:



(Dollars in millions)	Aggregate Maturities
2015	$	8.8
2016	44.5
2017	193.9
2018	247.2
2019	911.7
Thereafter	1,888.6
	3,294.7
Debt premium	1.9
	$	3,296.6