Indebtedness

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

Our principal debt obligations at March 31, 2023 were: (1) $245,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) $2,212,000 aggregate outstanding principal amount of senior unsecured notes; and (3) a $50,000 outstanding principal amount for one mortgage note.

Our $750,000 revolving credit facility is governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders that includes a feature under which the maximum aggregate borrowing availability may be increased to up to $1,950,000 in certain circumstances. Our revolving credit facility is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is July 31, 2023 and, subject to our payment of an extension fee and meeting certain other conditions, we have the option to extend the maturity date of our revolving credit facility by one six month period. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayment is due until maturity.

In March 2023, we amended our credit agreement to, among other things, replace LIBOR with the secured overnight financing rate, or SOFR, as the benchmark interest rate for calculating interest payable on the amounts outstanding under our revolving credit facility. We are required to pay interest at a rate of SOFR plus a premium, which was 110 basis points per annum at March 31, 2023, on the amount outstanding under our revolving credit facility. We also pay a facility fee on the total amount of lending commitments under our revolving credit facility, which was 25 basis points per annum at March 31, 2023. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. As of March 31, 2023 and December 31, 2022, the annual interest rate payable on borrowings under our revolving credit facility was 6.0% and 5.4%, respectively. The weighted average annual interest rate for borrowings under our revolving credit facility was 5.6% for the three months ended March 31, 2023. Effective April 1, 2023, the interest rate premium and facility fee increased to 145 basis points per annum and 30 basis points per annum, respectively, based upon changes to our credit ratings. We did not borrow any funds under our revolving credit facility during the three months ended March 31, 2022. As of March 31, 2023 and April 25, 2023, we had $245,000 and $260,000, respectively, outstanding under our revolving credit facility, and $505,000 and $490,000, respectively, available for borrowing.

Our credit agreement and senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business and property manager. Our credit agreement and senior unsecured notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to make distributions under certain circumstances. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and senior unsecured notes indentures and their supplements at March 31, 2023.

At March 31, 2023, one of our properties with a net book value of $54,256 was encumbered by a mortgage note with a principal balance of $50,000. Our mortgage note is non-recourse, subject to certain limited exceptions and does not contain any material financial covenants.