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DEBT
 6 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
DEBT DEBT
Secured Indebtedness
The Company’s secured debt consists of the following (dollars in thousands):
As of June 30, 2022
Interest Rate Type
Principal Balance as of
June 30, 2022 (1)
Principal Balance as of
December 31, 2021 (1)
Weighted Average
Interest Rate
Weighted Average
Effective Interest Rate (2)
Maturity
Date
Fixed Rate$51,092 $67,602 2.84 %3.33 %May 2031 - 
August 2051
(1)     Principal balance does not include deferred financing costs, net of $0.9 million as of each of June 30, 2022 and December 31, 2021.
(2)     Weighted average interest rate includes private mortgage insurance.
During the six months ended June 30, 2022, the Company repaid $15.4 million of debt secured by three facilities.
Senior Unsecured Notes
The Company’s senior unsecured notes consist of the following (dollars in thousands):
Principal Balance as of
TitleMaturity Date
June 30, 2022 (1)
December 31, 2021 (1)
5.125% senior unsecured notes due 2026 (“2026 Notes”)
August 15, 2026$500,000 $500,000 
5.88% senior unsecured notes due 2027 (“2027 Notes”)
May 17, 2027100,000 100,000 
3.90% senior unsecured notes due 2029 (“2029 Notes”)
October 15, 2029350,000 350,000 
3.20% senior unsecured notes due 2031 (“2031 Notes”)
December 1, 2031800,000 800,000 
$1,750,000 $1,750,000 
(1)    Principal balance does not include discount, net of $3.2 million and deferred financing costs, net of $12.8 million as of June 30, 2022 and does not include discount, net of $2.9 million and deferred financing costs, net of $13.6 million as of December 31, 2021. In addition, the weighted average effective interest rate as of June 30, 2022 was 4.01%.
The 2026 Notes and the 2027 Notes were assumed as a result of the Company’s merger with Care Capital Properties, Inc. in 2017 and accrue interest at a rate of 5.125% and 5.88%, respectively, per annum. Interest is payable semiannually on February 15 and August 15 of each year for the 2026 Notes and on May 17 and November 17 of each year for the 2027 Notes.
The 2029 Notes were issued by the Operating Partnership and, until redemption of the Company’s previously outstanding 5.375% senior notes due 2023 in October 2019, Sabra Capital Corporation, wholly owned subsidiaries of the Company, and accrue interest at a rate of 3.90% per annum. Interest is payable semiannually on April 15 and October 15 of each year.
The 2031 Notes were issued by the Operating Partnership, a wholly owned subsidiary of the Company, and accrue interest at a rate of 3.20% per annum. Interest is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2022.
The obligations under the 2027 Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances. The obligations under the 2026 Notes, 2029 Notes and 2031 Notes are fully and unconditionally guaranteed, on an unsecured basis, by Sabra; provided, however, that such guarantee is subject to release under certain customary circumstances.
The indentures and agreements (the “Senior Notes Indentures”) governing the 2026 Notes, 2027 Notes, 2029 Notes and 2031 Notes (collectively, the “Senior Notes”) include customary events of default and require the Company to comply with specified restrictive covenants. As of June 30, 2022, the Company was in compliance with all applicable financial covenants under the Senior Notes Indentures.
Credit Agreement
On September 9, 2019, the Operating Partnership and Sabra Canadian Holdings, LLC (together, the “Borrowers”), Sabra and the other parties thereto entered into a fifth amended and restated unsecured credit agreement (the “Credit Agreement”).
The Credit Agreement includes a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), a $460.0 million U.S. dollar term loan and a CAD $125.0 million Canadian dollar term loan (collectively, the “Term Loans”). Further, up to $175.0 million of the Revolving Credit Facility may be used for borrowings in certain foreign currencies. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion, subject to terms and conditions.
The Revolving Credit Facility has a maturity date of September 9, 2023, and includes two six-month extension options. The Term Loans have a maturity date of September 9, 2024.
No loss on extinguishment of debt was recognized during the three months ended June 30, 2022. During the six months ended June 30, 2022, the Company recognized $0.3 million of loss on extinguishment of debt related to write-offs of deferred financing costs in connection with the partial pay down of the U.S. dollar Term Loan.
As of June 30, 2022, there was $142.3 million (comprised of CAD $183.5 million) outstanding under the Revolving Credit Facility and $857.7 million available for borrowing.
Borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, Canadian Dollar Offered Rate (“CDOR”) for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) LIBOR or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, and (iii) one-month LIBOR plus 1.0% (the “Base Rate”). The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings, as defined in the Credit Agreement, and will range from 0.775% to 1.45% per annum for CDOR or LIBOR based borrowings and 0.00% to 0.45% per annum for borrowings at the Base Rate. As of June 30, 2022, the weighted average interest rate on the Revolving Credit Facility was 3.33%. In addition, the Operating Partnership pays a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Revolving Credit Facility regardless of amounts outstanding thereunder.
The U.S. dollar Term Loan bears interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) LIBOR or (b) the Base Rate. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings and will range from 0.85% to 1.65% per annum for LIBOR based borrowings and 0.00% to 0.65% per annum for borrowings at the Base Rate. As of June 30, 2022, the interest rate on the U.S. dollar Term Loan was 3.04%. The Canadian dollar Term Loan bears interest on the outstanding principal amount at a rate equal to CDOR plus an interest margin that ranges from 0.85% to 1.65% depending on the Debt Ratings. As of June 30, 2022, the interest rate on the Canadian dollar Term Loan was 3.48%.
The Company has interest rate swaps and interest rate collars that fix and set a cap and floor, respectively, for the LIBOR portion of the interest rate for $436.3 million of LIBOR-based borrowings under its U.S. dollar Term Loan at a weighted average rate of 1.14% and interest rate swaps that fix the CDOR portion of the interest rate for CAD $125.0 million of CDOR-based borrowings under its Canadian dollar Term Loan at a rate of 1.10%. As of June 30, 2022, the effective interest rate on the U.S. dollar and Canadian dollar Term Loans was 2.86% and 2.35%, respectively. In addition, the Canadian dollar Term Loan and the CAD $183.5 million outstanding under the Revolving Credit Facility are designated as net investment hedges. See Note 8, “Derivative and Hedging Instruments,” for further information.
The obligations of the Borrowers under the Credit Agreement are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances.
The Credit Agreement contains customary covenants that include restrictions or limitations on the ability to pay dividends, incur additional indebtedness, engage in non-healthcare related business activities, enter into transactions with affiliates and sell or otherwise transfer certain assets as well as customary events of default. The Credit Agreement also requires Sabra, through the Operating Partnership, to comply with specified financial covenants, which include a maximum total leverage ratio, a minimum secured debt leverage ratio, a minimum fixed charge coverage ratio, a maximum unsecured leverage
ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio. As of June 30, 2022, the Company was in compliance with all applicable financial covenants under the Credit Agreement.
Interest Expense
The Company incurred interest expense of $25.5 million and $50.5 million during the three and six months ended June 30, 2022, respectively, and $24.3 million and $48.7 million during the three and six months ended June 30, 2021, respectively. Interest expense includes non-cash interest expense of $2.8 million and $5.5 million for the three and six months ended June 30, 2022, respectively, and $1.7 million and $3.6 million for the three and six months ended June 30, 2021, respectively. As of June 30, 2022 and December 31, 2021, the Company had $16.6 million and $21.5 million, respectively, of accrued interest included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.
Maturities
The following is a schedule of maturities for the Company’s outstanding debt as of June 30, 2022 (in thousands): 
Secured
Indebtedness
Revolving Credit
    Facility (1)
Term LoansSenior NotesTotal
July 1 through December 31, 2022$969 $— $— $— $969 
20231,979 142,341 — — 144,320 
20242,034 — 556,963 — 558,997 
20252,089 — — — 2,089 
20262,147 — — 500,000 502,147 
Thereafter41,874 — — 1,250,000 1,291,874 
Total Debt51,092 142,341 556,963 1,750,000 2,500,396 
Discount, net— — — (3,207)(3,207)
Deferred financing costs, net(915)— (3,268)(12,785)(16,968)
Total Debt, Net$50,177 $142,341 $553,695 $1,734,008 $2,480,221 
(1)    Revolving Credit Facility is subject to two six-month extension options.