10. Unsecured Senior Notes

The following table is a summary of our unsecured senior notes outstanding as of March 31, 2017 and December 31, 2016 (dollars in thousands):


						Remaining
	Coupon		Effective		Maturity	Period of		Carrying Value at
	Rate		Rate (1)		Date	Amortization		March 31, 2017		December 31, 2016
2017 Convertible Notes	3.75	%	5.86	%	10/15/2017	0.5	years	$	411,885	$	411,885
2018 Convertible Notes	4.55	%	6.10	%	3/1/2018	0.9	years		369,981		599,981
2019 Convertible Notes	4.00	%	5.35	%	1/15/2019	1.8	years		341,363		341,363
2021 Senior Notes	5.00	%	5.32	%	12/15/2021	4.7	years		700,000		700,000
2023 Convertible Notes	4.38	%	4.86	%	4/1/2023	6.0	years		250,000		—
Total principal amount									2,073,229		2,053,229
Unamortized discount—Convertible Notes									(23,907)		(26,135)
Unamortized discount—Senior Notes									(9,297)		(9,728)
Unamortized deferred financing costs									(6,641)		(5,822)
Carrying amount of debt components								$	2,033,384	$	2,011,544
Carrying amount of conversion option equity components recorded in additional paid-in capital								$	31,638	$	45,988

(1)

Effective rate includes the effects of underwriter purchase discount and the adjustment for the conversion option on our convertible notes, the value of which reduced the initial liability and was recorded in additional paid‑in‑capital.

Senior Notes Due 2021

On December 16, 2016, we issued $700.0 million of 5.00% Senior Notes due 2021 (the “2021 Notes”). The 2021 Notes mature on December 15, 2021. Prior to September 15, 2021, we may redeem some or all of the 2021 Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after September 15, 2021, we may redeem some or all of the 2021 Notes at a price equal to 100% of the principal amount thereof. In addition, we may redeem up to 35% of the 2021 Notes at the applicable redemption prices using the proceeds of certain equity offerings.

Convertible Senior Notes

On March 29, 2017, we issued $250.0 million of 4.375% Convertible Senior Notes due 2023 (the “2023 Notes”) resulting in gross proceeds of $247.5 million. At issuance, we allocated $243.7 million and $3.8 million of the carrying value of the 2023 Notes to its debt and equity components, respectively. Also on March 29, 2017, the proceeds from the issuance of the 2023 Notes were used to repurchase $230.0 million of the 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”) for $250.7 million. The repurchase price was allocated between the fair value of the liability component and the fair value of the equity component of the 2018 Notes at the repurchase date. The portion of the repurchase price attributable to the equity component totaled $18.1 million and was recognized as a reduction of additional paid-in capital during the three months ended March 31, 2017. The portion of the repurchase price attributable to the liability component exceeded the net carrying amount of the liability component by $5.9 million, which was recognized as a loss on extinguishment of debt in our condensed consolidated statement of operations during the three months ended March 31, 2017. The repurchase of the 2018 Notes was not considered part of the repurchase program approved by our board of directors (refer to Note 16) and therefore does not reduce our available capacity for future repurchases under the repurchase program. There were no repurchases of Convertible Notes during the three months ended March 31, 2016.

On October 8, 2014, we issued $431.3 million of 3.75% Convertible Senior Notes due 2017 (the “2017 Notes”). On February 15, 2013, we issued $600.0 million of 4.55% Convertible Senior Notes due 2018 (the “2018 Notes”). On July 3, 2013, we issued $460.0 million of 4.00% Convertible Senior Notes due 2019 (the “2019 Notes”).

The following table details the conversion attributes of our Convertible Notes outstanding as of March 31, 2017 (amounts in thousands, except rates):


	March 31, 2017			Conversion Spread Value - Shares (3)
	Conversion	Conversion		For the Three Months Ended March 31,
	Rate (1)	Price (2)		2017	2016
2017 Notes	41.7397	$	23.96	—	—
2018 Notes	47.5317	$	21.04	1,200	—
2019 Notes	50.2114	$	19.92	2,020	—
2023 Notes	38.5959	$	25.91	—	—
				3,220	—

(1)

The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of Convertible Notes converted, as adjusted in accordance with the indentures governing the Convertible Notes (including the applicable supplemental indentures) as a result of the spin-off of our former single family residential segment to our stockholders in January 2014 and cash dividend payments.

(2)

As of March 31, 2017 and 2016, the market price of the Company’s common stock was $22.58 and $18.93 per share, respectively.

(3)

The conversion spread value represents the portion of the convertible senior notes that are “in-the-money”, representing the value that would be delivered to investors in shares upon an assumed conversion.

The if-converted value of the 2018 Notes and 2019 Notes exceeded their principal amount by $27.1 million and $45.6 million, respectively, at March 31, 2017 as the closing market price of the Company’s common stock of $22.58 per share exceeded the implicit conversion prices of $21.04 and $19.92 per share, respectively. However, the if‑converted value of the 2017 Notes and 2023 Notes was less than their principal amount by $23.7 million and $32.1 million, respectively, at March 31, 2017 as the closing market price of the Company’s common stock was less than the implicit conversion prices of $23.96 and $25.91 per share, respectively.

The Company has asserted its intent and ability to settle the principal amount of the Convertible Notes in cash. As such, only the conversion spread value, if any, is included in the computation of diluted EPS.

Conditions for Conversion

Prior to April 15, 2017 for the 2017 Notes, September 1, 2017 for the 2018 Notes, July 15, 2018 for the 2019 Notes and October 1, 2022 for the 2023 Notes, the Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 110%, in the case of the 2017 Notes and the 2023 Notes, or 130%, in the case of the 2018 Notes and the 2019 Notes, of the conversion price of the respective Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the Convertible Notes is less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10-day average closing market price of its common stock or the per-share value of certain distributions exceeds the market price of the Company’s common stock by more than 10% or (4) certain other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.) occur.

On or after April 15, 2017, in the case of the 2017 Notes, September 1, 2017, in the case of the 2018 Notes, July 15, 2018, in the case of the 2019 Notes, and October 1, 2022, in the case of the 2023 Notes, holders may convert each of their Convertible Notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.