Unsecured Credit Agreements

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Unsecured Credit Agreements

9. Unsecured Credit Agreements

The following table summarizes the Company's unsecured credit agreements:

	Outstanding Balance
(in thousands, except interest rates)	June 30, 2022			December 31, 2021			Interest Rate	Maturity Date
Unsecured revolving    credit facility	$	320,657		$	102,000		Applicable reference rate + 0.85% (a) (b) (c)	Mar. 2026
Unsecured term loans:
2022 Unsecured Term Loan		—			60,000		one-month LIBOR + 1.00% (c)	Feb. 2022 (d)
2024 Unsecured Term Loan		190,000			190,000		one-month LIBOR + 1.00% (c)	Jun. 2024
2026 Unsecured Term Loan		400,000			400,000		one-month LIBOR + 1.00% (c)	Feb. 2026
Total unsecured term loans		590,000			650,000
Unamortized debt issuance costs, net		(2,902	)		(3,329	)
Total unsecured term loans, net		587,098			646,671
Senior unsecured notes:
2027 Senior Unsecured Notes -    Series A		150,000			150,000		4.84%	Apr. 2027
2028 Senior Unsecured Notes -    Series B		225,000			225,000		5.09%	Jul. 2028
2030 Senior Unsecured Notes -    Series C		100,000			100,000		5.19%	Jul. 2030
2031 Senior Unsecured Public Notes		375,000			375,000		2.60%	Sep. 2031
Total senior unsecured notes		850,000			850,000
Unamortized debt issuance costs and    original issuance discount, net		(5,822	)		(6,199	)
Total senior unsecured notes, net		844,178			843,801
Total unsecured debt, net	$	1,751,933		$	1,592,472

(a)At June 30, 2022, a balance of $243.0 million was subject to the one-month Secured Overnight Financing Rate of 1.69%. The remaining balance includes $100 million CAD borrowings remeasured to $77.7 million USD, which was subject to the one-month Canadian Dollar Offered Rate of 2.23%.

(b)At December 31, 2021, interest rate was one-month LIBOR plus 1.00%

(c)At June 30, 2022 and December 31, 2021, one-month LIBOR was 1.79% and 0.10%, respectively.

(d)The 2022 Unsecured Term Loan was paid in full in February 2022, with borrowings from the unsecured revolving credit facility.

At June 30, 2022, the weighted average interest rate on all outstanding borrowings was 3.33%, exclusive of interest rate swap agreements.

The Company is subject to various financial and operational covenants and financial reporting requirements pursuant to its unsecured credit agreements. These covenants require the Company to maintain certain financial ratios, including leverage, fixed charge coverage, debt service coverage, aggregate debt ratio, consolidated income available for debt to annual debt service charge, total unencumbered assets to total unsecured debt, and secured debt ratio, among others. As of June 30, 2022, and for all periods presented the Company believes it was in compliance with all of its loan covenants. Failure to comply with the covenants would result in a default which, if the Company were unable to cure or obtain a waiver from the lenders, could accelerate the repayment of the obligations. Further, in the event of default, the Company may be restricted from paying dividends to its stockholders in excess of dividends required to maintain its REIT qualification. Accordingly, an event of default could have a material and adverse impact on the Company.

On January 28, 2022, the Company amended and restated the unsecured revolving credit facility to increase the available borrowings to $1.0 billion and extend the maturity date to March 31, 2026. In addition to USD, borrowings under the unsecured revolving credit facility can be made in Pound Sterling, Euros or Canadian Dollars ("CAD") up to an aggregate amount of $500.0 million. Prior to the amendment, borrowings under the credit facility were subject to interest at variable rates based on LIBOR plus a margin based on the Company's current credit rating ranging between 0.825% to 1.55% per annum. Borrowings under the amended credit facility are subject to interest only payments at variable rates equal to the applicable reference rate plus a margin based on the Company's credit rating, ranging between 0.725% and 1.400%. In addition, the amended credit facility is subject to a facility fee on the amount of the revolving commitments, based on the Company's credit rating. The applicable facility fee is 0.200% per annum.

For the six months ended June 30, 2022, the Company incurred $3.8 million in debt issuance costs associated with the unsecured revolving credit facility. For the six months ended June 30, 2021, the Company incurred $1.0 million in debt issuance costs associated with the amended 2026 Unsecured Term Loan. The Company did not incur debt issuance costs during the three months ended June 30, 2022 and 2021.

For each separate debt instrument, on a lender by lender basis, in accordance with ASC 470-50, Debt Modifications and Extinguishment, the Company performed an assessment of whether the transaction was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt. Debt issuance costs are either deferred and amortized over the term of the associated debt or expensed as incurred.

With respect to the unsecured revolving credit facility amendment, the transaction was deemed to be new debt and therefore, the debt issuance costs incurred during the six months ended June 30, 2022, have been deferred and are being amortized over the term of the associated debt. With respect to the amended 2026 Unsecured Term Loan, the transaction was deemed to be a modification of existing debt and therefore the $0.9 million of debt issuance costs paid to lenders were deferred and are being amortized over the term of the associated debt. The remaining debt issuance costs of $0.1 million were expensed as incurred during the six months ended June 30, 2021.

Debt issuance costs and original issuance discounts are amortized as a component of Interest expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. The following table summarizes debt issuance cost and original issuance discount amortization:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Debt issuance costs and original issuance discount amortization	$	900	$	956	$	1,756	$	1,870