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Debt of the Company

12 Months Ended

Dec. 31, 2019

In this Note 9, the “Company” refers only to Americold Realty Trust and not to any of its subsidiaries.

The Company itself does not have any indebtedness. All debt is held directly or indirectly by the Operating Partnership.

The Company guarantees the Operating Partnership’s obligations with respect to its outstanding debt as of December 31, 2019 and 2018, as detailed in Note 10, with the exception of the 2013 Mortgage Loans which have limited guarantees for fraud and environmental carve-outs by Americold Realty Operating Partnership, L.P.

Debt of the Operating Partnership

A summary of outstanding indebtedness of the Operating Partnership as of December 31, 2019 and 2018 is as follows (in thousands):



		Contractual Interest Rate	Effective Interest Rate as of December 31, 2019	2019					2018
Indebtedness	Stated Maturity Date			Carrying Amount			Estimated Fair Value		Carrying Amount			Estimated Fair Value
2013 Mortgage Loans
Senior note	5/2023	3.81%	4.14%	$	181,443		$	184,618	$	187,957		$	184,667
Mezzanine A	5/2023	7.38%	7.55%	70,000			70,525		70,000			67,900
Mezzanine B	5/2023	11.50%	11.75%	32,000			32,320		32,000			31,120
Total 2013 Mortgage Loans				283,443			287,463		289,957			283,687

Senior Unsecured Notes
Series A notes	1/2026	4.68%	4.77%	200,000			217,750		200,000			202,500
Series B notes	1/2029	4.86%	4.92%	400,000			439,000		400,000			407,000
Series C notes	1/2030	4.10%	4.15%	350,000			366,625		—			—
Total Senior Unsecured Notes				950,000			1,023,375		600,000			609,500

2018 Senior Unsecured Term Loan A Facility⁽¹⁾	1/2023	L+1.00%	3.14%	475,000			472,625		475,000			472,625

Total principal amount of indebtedness				1,708,443			1,783,463		1,364,957			1,365,812
Less deferred financing costs				(12,996		)	n/a		(13,943		)	n/a
Total indebtedness, net of unamortized deferred financing costs				$	1,695,447		$	1,783,463	$	1,351,014		$	1,365,812

2018 Senior Unsecured Revolving Credit Facility⁽¹⁾	1/2021	L+0.90%	0.36%	$	—		$	—	$	—		$	—


(1)	L = one-month LIBOR

2018 Senior Unsecured Credit Facility

On December 4, 2018, the Company entered into the 2018 Senior Unsecured Credit Facility to, among other things, (i) increase the revolver borrowing capacity from $450 million to $800 million, (ii) convert the credit facility (term loan and revolver) from a secured credit facility to an unsecured credit facility, and (iii) decrease the applicable interest rate margins from 2.35% to 1.45% and decrease the fee on unused borrowing capacity by five basis points. The terms of the revolver allow for the ability to draw proceeds in multiple currencies, up to $400 million. In connection with entering into the original agreement and subsequent amendments for the Term Loan A Credit Facility, we capitalized approximately $8.9 million of debt issuance costs, which we amortize as interest expense under the effective interest method. The unamortized balance of Term Loan A debt issuance costs are included in “Mortgage notes, senior unsecured notes and term loan” on the accompanying Consolidated Balance Sheets. As of December 31, 2019, $2.8 million of unamortized debt issuance costs related to the revolving credit facility are included in “Other assets” in the accompanying Consolidated Balance Sheet.

On September 24, 2019, the Company reduced our interest rate margins from 1.45% to 1.00% on the Term Loan A, and 1.45% to 0.90% on the Revolving Credit Facility. In addition, the Company decreased the fee on unused borrowing capacity to a flat 20 basis points regardless of the percentage of total commitment used. The Company received a favorable credit rating during the third quarter of 2019. This rating, when combined with existing ratings, allowed the Company to transition to a favorable ratings-based pricing grid.

Our 2018 Senior Unsecured Revolving Credit Facility is structured to include a borrowing base, which allows us to borrow against the lesser of our Senior Unsecured Term Loan A Facility balance outstanding, our Senior Unsecured Notes balance outstanding, $800 million in revolving credit commitments, and the value of certain owned real estate assets and ground leased assets.

Our 2018 Senior Unsecured Credit Facility contains representations, covenants and other terms customary for a publicly traded REIT. In addition, it contains certain financial covenants, as defined in the credit agreement, including:


•	a maximum leverage ratio of less than or equal to 60% of our total asset value;


•	a minimum borrowing base coverage ratio of greater than or equal to 1.00 to 1.00;


•	a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00;


•	a minimum borrowing base debt service coverage ratio of greater than or equal to 2.00 to 1.00;


•	a minimum tangible net worth requirement of greater than or equal to $1.1 billion plus 70% of any future net equity proceeds following the completion of the IPO transactions;


•	a maximum recourse secured debt ratio of less than or equal to 15% of our total asset value; and


•	a maximum secured debt ratio of less than or equal to 40% of total asset value.

Our 2018 Senior Unsecured Credit Facility is fully recourse to our Operating Partnership. As of December 31, 2019, the Company was in compliance with all debt covenants.

Series A, B and C Senior Unsecured Notes

On November 6, 2018, the Company priced a debt private placement transaction consisting of (i) $200 million senior unsecured notes with a coupon of 4.68% due January 8, 2026 (“Series A”) and (ii) $400 million senior unsecured notes with a coupon of 4.86% due January 8, 2029 (“Series B”), (collectively referred to as the “Senior Unsecured Notes”). The transaction closed on December 4, 2018. Interest will be paid on January 8 and July 8 of each year until maturity, with the first payment occurring July 8, 2019. The notes are general unsecured senior obligations of the Company and are guaranteed by the Company and the subsidiaries of the Company. The Company applied a portion of the proceeds of the private placement transaction to repay the outstanding balances of the $600 million Americold 2010 LLC Trust, Commercial Mortgage Pass-Through Certificates, Series 2010, ART (2010 Mortgage Loans). The Company also used the remaining proceeds to extinguish the Australian term loan and the New Zealand term loan (ANZ Loans). See below for further detail regarding the early extinguishment of debt under Loss on debt extinguishment, modifications and termination of derivative instruments.

On April 26, 2019, we priced a debt private placement transaction consisting of $350 million senior unsecured notes with a coupon of 4.10% due January 8, 2030 (“Series C”). The transaction closed on May 7, 2019. Interest is payable on January 8 and July 8 of each year until maturity, with the first payment occurring January 8, 2020. The initial January 8, 2020 payment will include interest accrued since May 7, 2019. The notes are general unsecured obligations of the Company and are guaranteed by the Company and the subsidiaries of the Company. The Company applied the proceeds of the private placement transaction to repay the indebtedness outstanding under our senior unsecured revolving credit facility incurred in connection with the funding of the Cloverleaf and Lanier acquisitions, and general corporate purposes.

The Senior Unsecured Notes and guarantee agreement includes a prepayment option executable at any time during the term of the loans. The prepayment can be either a partial payment, or payment in full, as long as the partial payment is at least 5% of the outstanding principal. Any prepayment in full must include a make-whole amount, which is the discounted remaining scheduled payments due to the lender. The discount rate to be used is equal to 0.50% plus the yield to maturity reported for the most recently actively traded U.S. Treasury Securities with a maturity

equal to the remaining average life of the prepaid principal. The Company must give each lender at least 10 day’s written notice whenever it intends to prepay any portion of the debt.

If a change in control occurs for the Company, the Company must issue an offer to prepay the remaining portion of the debt to the lenders. The prepayment amount will be 100% of the principal amount, as well as accrued and unpaid interest.

The Senior Unsecured Notes require compliance with leverage ratios, secured and unsecured indebtedness ratios, and unsecured indebtedness to qualified assets ratios. In addition, the Company is required to maintain at all times a debt rating for each series of notes from a nationally recognized statistical rating organization. The Senior Unsecured Notes agreement includes the following financial covenants:


•	a maximum leverage ratio of less than or equal to 60% of our total asset value;


•	a maximum unsecured indebtedness to qualified assets ratio of less than 0.60 to 1.00;


•	a minimum fixed charge coverage ratio of greater than or equal to 1.50 to 1.00;


•	a minimum unsecured debt service ratio of greater than or equal to 2.00 to 1.00; and


•	a maximum total secured indebtedness ratio of less than 0.40 to 1.00.

As of December 31, 2019, the Company was in compliance with all debt covenants.

2013 Mortgage Loans

On May 1, 2013, we entered into a mortgage financing in an aggregate principal amount of $322.0 million, which we refer to as the 2013 Mortgage Loans. The debt consists of a senior debt note and two mezzanine notes. The components are cross-collateralized and cross-defaulted. The senior debt note requires monthly principal payments. The mezzanine notes require no principal payments until the stated maturity date in May 2023. The interest rates on the notes are fixed and range from 3.81% to 11.50% per annum. The senior debt note and the two mezzanine notes remain subject to yield maintenance provisions. We used the net proceeds of these loans to refinance certain mortgage loans, acquire two warehouses, and fund general corporate purposes.

The 2013 Mortgage Loans are collateralized by 15 warehouses. The terms governing the 2013 Mortgage Loans require us to maintain certain cash amounts in accounts that are restricted as to their use for the respective warehouses. As of December 31, 2019, the amount of restricted cash associated with the 2013 Mortgage Loans was $3.2 million. Additionally, if we do not maintain certain financial thresholds, including a debt service coverage ratio of 1.10x, the cash generated will further be temporarily restricted and limited to the use for scheduled debt service and operating costs. The debt service coverage ratio as of December 31, 2019 was 1.76x. The 2013 Mortgage Loans are non-recourse to the Company, subject to customary non-recourse provisions as stipulated in the agreements.

The mortgage loan also requires compliance with other financial covenants, including a debt coverage ratio and cash flow calculation, as defined. As of December 31, 2019, the Company was in compliance with all debt covenants.

Debt Covenants

The Company’s Senior Unsecured Credit Facilities, the Senior Unsecured Notes, and 2013 Mortgage Loans require financial statement reporting, periodic requirements to report compliance with established thresholds and performance measurements, and affirmative and negative covenants that govern allowable business practices of the Company. The affirmative and negative covenants include continuation of insurance, maintenance of collateral, the

maintenance of REIT status, and the Company’s ability to enter into certain types of transactions or exposures in the normal course of business. As of December 31, 2019, the Company was in compliance with all debt covenants.

Loss on debt extinguishment, modifications and termination of derivative instruments

During 2018, the Company completed multiple refinancing and extinguishment of debt transactions resulting in an aggregate amount of $47.6 million each of which was recorded to “Loss on debt extinguishment, modifications and termination of derivative instruments”. During the first quarter of 2018, simultaneous with the IPO, the Company closed on a Senior Secured Term Loan A and repaid the Term Loan B. Shortly thereafter, the Company amended the facility by repaying a portion of the Term Loan A and increasing the capacity on the revolving credit facility. The total amount recorded as a result of these transactions totaled $21.4 million, representing the write-off of unamortized deferred financing costs and debt discount from Term Loan B. During the fourth quarter of 2018, the 2010 Mortgage Loans were extinguished. This resulted in an $18.5 million defeasance fee, as well as a $3.4 million write-off of unamortized deferred financing costs. Additionally, during the fourth quarter of 2018, the ANZ Loans were fully prepaid, which resulted in a write-off of $2.2 million in unamortized deferred financing costs and $1.8 million charge for termination of the related interest rate swaps.

The aggregate maturities of indebtedness as of December 31, 2019, including amortization of principal amounts due under the mortgage notes for each of the next five years and thereafter, are as follows:



Years Ending December 31:	(In thousands)
2020	$	6,750
2021	7,035
2022	7,312
2023	737,346
2024	—
Thereafter	950,000
Aggregate principal amount of debt	1,708,443
Less unamortized deferred financing costs	(12,996		)
Total debt net of deferred financing costs	$	1,695,447

Special Purpose Entity (SPE) Separateness

Each of the Company’s legal entities listed in the table below is a special purpose, bankruptcy remote entity, meaning that such entity’s assets and credit are not available to satisfy the debt and other obligations of either the Company or any of its other affiliates.



Legal Entity/SPE		Related Obligation
ART Mortgage Borrower Propco 2013 LLC		2013 Mortgage Notes
ART Mortgage Borrower Opco 2013 LLC		2013 Mortgage Notes

For financial reporting purposes, the assets, liabilities, results of operations, and cash flows of each legal entity in the table above are included in the Company’s consolidated financial statements. Because each legal entity is separate and distinct from the Company and its affiliates, the creditors of each legal entity have a claim on the assets of such

legal entity prior to those assets becoming available to the legal entity’s equity holders and, therefore, to the creditors of the Company or its other affiliates.