Debt

Debt consisted of the following as of September 30, 2015 and December 31, 2014 (amounts in thousands):



					As of September 30, 2015
	Principal Balance as of September 30, 2015		Principal Balance as of December 31, 2014		Stated Rate		Effective Rate⁽¹⁾		Maturity Date⁽²⁾
Mortgage debt collateralized by:
Fixed rate mortgage debt
10 Union Square	$	20,380	$	20,641	6.00	%	6.74	%	5/1/2017
10 Bank Street	32,375		32,847		5.72	%	6.21	%	6/1/2017
1542 Third Avenue	18,327		18,628		5.90	%	6.57	%	6/1/2017
First Stamford Place	239,675		242,294		5.65	%	6.16	%	7/5/2017
1010 Third Avenue and 77 West 55th Street	27,200		27,595		5.69	%	6.37	%	7/5/2017
383 Main Avenue	29,418		29,852		5.59	%	6.01	%	7/5/2017
1333 Broadway	68,883		69,575		6.32	%	3.79	%	1/5/2018
1400 Broadway
(first lien mortgage loan)	68,977		69,689		6.12	%	3.34	%	2/5/2018
(second lien mortgage loan)	9,651		9,803		3.35	%	3.35	%	2/5/2018
112 West 34th Street
(first lien mortgage loan)	76,682		77,484		6.01	%	3.28	%	4/5/2018
(second lien mortgage loan)	9,671		9,763		6.56	%	3.58	%	4/5/2018
1350 Broadway	38,489		38,900		5.87	%	3.77	%	4/5/2018
Metro Center	98,430		99,845		3.59	%	3.67	%	11/5/2024
Total fixed rate mortgage debt	738,158		746,916
Floating rate mortgage debt
One Grand Central Place⁽³⁾	—		91,000
1359 Broadway⁽³⁾	—		44,146
Total floating rate mortgage debt	—		135,146
Total mortgage debt	738,158		882,062
Senior unsecured notes - exchangeable	250,000		250,000		2.63	%	3.93	%	8/15/2019
Senior unsecured notes:
Series A	100,000		—		3.93	%	3.96	%	3/27/2025
Series B	125,000		—		4.09	%	4.12	%	3/27/2027
Series C	125,000		—		4.18	%	4.21	%	3/27/2030
Unsecured revolving credit facility	20,000		—		⁽⁴⁾		⁽⁴⁾		1/23/2019
Unsecured term loan facility	265,000		—		⁽⁵⁾		⁽⁵⁾		8/24/2022
Secured revolving credit facility	—		170,000		⁽⁴⁾		⁽⁴⁾
Secured term credit facility	—		300,000		⁽⁴⁾		⁽⁴⁾
Total principal	1,623,158		1,602,062
Unamortized premiums, net of unamortized discount	6,250		9,590
Total	$	1,629,408	$	1,611,652

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(1)	The effective rate is the yield as of September 30, 2015, including the effects of debt issuance costs and the amortization of the fair value of debt adjustment.


(2)	Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.


(3)	Repaid in 2015.


(4)	The secured revolving and term credit facility was terminated on January 23, 2015 concurrent with entering into the unsecured revolving credit facility. At September 30, 2015, the unsecured revolving credit facility bears a floating rate at 30 day LIBOR plus 1.15%. The rate at September 30, 2015 was 1.34%.


(5)	The unsecured term loan facility bears a floating rate at 30 day LIBOR plus 1.60%. The rate at September 30, 2015 was 1.79%. Pursuant to a forward interest rate swap agreement, the LIBOR rate was fixed at 2.1485% for $265.0 million of the unsecured term loan facility for the period beginning on August 31, 2017 through maturity.

Principal Payments

Aggregate required principal payments at September 30, 2015 are as follows (amounts in thousands):



Year	Amortization		Maturities		Total
2015	$	3,014	$	—	$	3,014
2016	12,387		—		12,387
2017	10,070		355,761		365,831
2018	2,880		262,210		265,090
2019	2,188		270,000		272,188
2020 and thereafter	11,974		692,674		704,648
Total	$	42,513	$	1,580,645	$	1,623,158

Unsecured Revolving Credit Facility

On January 23, 2015, we entered into an unsecured revolving credit agreement, which is referred to herein as the “unsecured revolving credit facility,” with Bank of America, Merrill Lynch, Goldman Sachs and the other lenders party thereto. Merrill Lynch acted as joint lead arranger; Bank of America acted as administrative agent; and Goldman Sachs acted as syndication agent and joint lead arranger.

Concurrently with entering into the unsecured revolving credit facility, on January 23, 2015, we terminated our secured revolving and term credit facility and wrote off $1.3 million of deferred financing costs. In connection with the termination of the secured revolving and term credit facility, all of the guarantors thereunder were released from their guaranty obligations, all liens created thereby were terminated, and all collateral pledged thereunder was released.

The unsecured revolving credit facility is comprised of a revolving credit facility in the maximum original principal amount of $800.0 million. The unsecured revolving credit facility contains an accordion feature that would allow us to increase the maximum aggregate principal amount to $1.25 billion under specified circumstances. As of September 30, 2015, the unsecured revolving credit facility had an outstanding balance of $20.0 million.

Amounts outstanding under the unsecured revolving credit facility bear interest at a floating rate equal to, at our election, (x) a Eurodollar rate, plus a spread that ranges from 0.875% to 1.600% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that ranges from 0.000% to 0.600% depending upon our leverage ratio and credit rating. In addition, the unsecured revolving credit facility permits us to borrow at competitive bid rates determined in accordance with the procedures described in the unsecured revolving credit facility. We paid certain customary fees and expense reimbursements.

The initial maturity of the unsecured revolving credit facility is January 2019. We have the option to extend the initial term for up to two additional 6-month periods, subject to certain conditions, including the payment of an extension fee equal to 0.075% of the then outstanding commitments under the unsecured revolving credit facility.

The unsecured revolving credit facility includes the following financial covenants: (i) maximum leverage ratio of total indebtedness to total asset value of the loan parties and their consolidated subsidiaries will not exceed 60%, (ii) consolidated secured indebtedness will not exceed 40% of total asset value, (iii) tangible net worth will not be less than $745.4 million plus 75% of net equity proceeds received by us (other than proceeds received within ninety (90) days after the redemption, retirement or repurchase of ownership or equity interests in us up to the amount paid by us in connection with such redemption, retirement or repurchase, where, the net effect is that we shall not have increased our net worth as a result of any such proceeds), (iv) adjusted EBITDA (as defined in the unsecured revolving credit facility) to consolidated fixed charges will not be less than 1.50x, (v) the aggregate net operating income with respect to all unencumbered eligible properties to the portion of interest expense attributable to unsecured indebtedness will not be less than 1.75x, (vi) the ratio of total unsecured indebtedness to unencumbered asset value will not exceed 60%, and (vii) consolidated secured recourse indebtedness will not exceed 10% of total asset value (provided, however, this covenant shall not apply at any time after we achieve a debt ratings from at least two of Moody’s, S&P and Fitch, and such debt ratings are Baa3 or better (in the case of a rating by Moody’s) or BBB- or better (in the case of a rating by S&P or Fitch)).

The unsecured revolving credit facility contains customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates, and will require certain customary financial reports. The unsecured revolving credit facility contains customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control (defined in the definitive documentation for the unsecured credit facility).

As of September 30, 2015, we were in compliance with the covenants under the unsecured revolving credit facility.

Secured Revolving and Term Credit Facility

As of December 31, 2014, the secured revolving and term credit facility had an outstanding balance of $470.0 million. The secured revolving and term credit facility was terminated on January 23, 2015 concurrent with entering into the unsecured revolving credit facility described above.

Senior Unsecured Notes

Exchangeable Senior Notes

During August 2014, we issued $250.0 million principal amount of 2.625% Exchangeable Senior Notes (“2.625% Exchangeable Senior Notes”) due August 15, 2019. For the three and nine months ended September 30, 2015, total interest expense related to the 2.625% Exchangeable Senior Notes was $2.4 million and $7.3 million, respectively, consisting of (i) the contractual interest expense of $1.6 million and $4.9 million, respectively, (ii) the additional non-cash interest expense of $0.7 million and $2.0 million respectively, relating to the accretion of the debt discount, and (iii) the amortization of deferred financing costs of $0.1 million and $0.4 million, respectively. For the three and nine months ended September 30, 2014, total interest expense related to the Exchangeable Senior Notes was $1.3 million consisting of (i) the contractual interest expense of $0.9 million, (ii) the additional non-cash interest expense of $0.3 million related to the accretion of the debt discount, and (iii) the amortization of deferred financing costs of $0.1 million.

Series A, Series B, and Series C Senior Notes

During March 2015, we issued and sold an aggregate principal amount of $350 million senior unsecured notes consisting of $100 million of 3.93% Series A Senior Notes due 2025, $125 million of 4.09% Series B Senior Notes due 2027, and $125 million of 4.18% Series C Senior Notes due 2030 (together, the “Series A, B and C Senior Notes”). Interest on the Series A, B and C Senior Notes is payable quarterly.

The terms of the Series A, B and C Senior Notes agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and will require certain customary financial reports. It also requires compliance with financial ratios consistent with our unsecured revolving credit facility including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness.

The proceeds from the issuance of the Series A, B and C Senior Notes were used to repay outstanding mortgage debt, reduce amounts outstanding under the unsecured revolving credit facility and for other general corporate purposes. As of September 30, 2015, we were in compliance with the covenants under the Series A, B and C Senior Notes.

Unsecured Term Loan Facility

During August 2015, we entered into a senior unsecured term loan facility, which is referred to herein as the “term loan facility” with Wells Fargo Bank, National Association, as administrative agent, Capital One, National Association, as syndication agent, PNC Bank, National Association, as documentation agent, and the lenders from time to time party thereto.

The term loan facility is in the original principal amount of up to $265.0 million, all of which was borrowed at closing. We may request incremental term loans up to an additional $100.0 million under specified circumstances, for a maximum aggregate principal amount not to exceed $365.0 million.

Amounts outstanding under the term loan facility bear interest at a floating rate equal to, at our election, (x) a LIBOR rate, plus a spread that ranges from 1.400% to 2.350% depending upon our leverage ratio and credit rating; or (y) a base rate, plus a spread that ranges from 0.400% to 1.350% depending upon our leverage ratio and credit rating. Pursuant to a forward interest rate swap agreement, we effectively fixed LIBOR at 2.1485% for $265.0 million of the term loan facility for the period beginning on August 31, 2017 through maturity. In connection with the closing of the term loan facility, we paid certain customary fees and expense reimbursements.

The term loan facility matures on August 24, 2022. We may prepay loans under the term loan facility at any time, subject to certain notice requirements. To the extent that we prepay all or any portion of a loan on or prior to August 24, 2017, we will pay a prepayment premium equal to (i) if such prepayment occurs on or prior to August 24, 2016, 2.00% of the principal amount so prepaid, and (ii) if such prepayment occurs after August 24, 2016 but on or prior to August 24, 2017, 1.00% of the principal amount so prepaid.

The terms of the term loan facility agreement include customary covenants, including limitations on liens, investment, debt, fundamental changes, and transactions with affiliates and will require certain customary financial reports. The term loan facility requires compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, a maximum unsecured leverage ratio and a maximum amount of secured recourse indebtedness. It also contains customary events of default (subject in certain cases to specified cure periods). These terms in the term loan facility agreement are consistent with the terms under our unsecured revolving credit facility agreement.

The proceeds from the term loan facility were used to repay borrowings made under the unsecured revolving credit facility. As of September 30, 2015, we were in compliance with the covenants under the term loan facility.