Debt

12 Months Ended

Dec. 31, 2019

Debt consisted of the following as of December 31, 2019 and 2018 (amounts in thousands):



							As of December 31, 2019
	Principal Balance as of December 31, 2019			Principal Balance as of December 31, 2018			Stated Rate		Effective Rate⁽¹⁾		Maturity Date⁽²⁾
Fixed rate mortgage debt
Metro Center	$	89,650		$	91,838		3.59	%	3.68	%	11/5/2024
10 Union Square	50,000			50,000			3.70	%	3.97	%	4/1/2026
1542 Third Avenue	30,000			30,000			4.29	%	4.53	%	5/1/2027
First Stamford Place⁽³⁾	180,000			180,000			4.28	%	4.45	%	7/1/2027
1010 Third Avenue and 77 West 55th Street	38,251			38,995			4.01	%	4.22	%	1/5/2028
10 Bank Street	32,920			33,779			4.23	%	4.36	%	6/1/2032
383 Main Avenue	30,000			30,000			4.44	%	4.55	%	6/30/2032
1333 Broadway	160,000			160,000			4.21	%	4.29	%	2/5/2033
Total mortgage debt	610,821			614,612
Senior unsecured notes - exchangeable	—			250,000			—	%	—	%	—
Senior unsecured notes: ⁽⁴⁾
Series A	100,000			100,000			3.93	%	3.96	%	3/27/2025
Series B	125,000			125,000			4.09	%	4.12	%	3/27/2027
Series C	125,000			125,000			4.18	%	4.21	%	3/27/2030
Series D	115,000			115,000			4.08	%	4.11	%	1/22/2028
Series E	160,000			160,000			4.26	%	4.27	%	3/22/2030
Series F	175,000			175,000			4.44	%	4.45	%	3/22/2033
Unsecured revolving credit facility ⁽⁴⁾	—			—			⁽⁵⁾		⁽⁵⁾		8/29/2021
Unsecured term loan facility ⁽⁴⁾	265,000			265,000			⁽⁶⁾		⁽⁶⁾		8/29/2022
Total principal	1,675,821			1,929,612
Unamortized discount	—			(1,647		)
Deferred financing costs, net	(7,247		)	(9,032		)
Total	$	1,668,574		$	1,918,933

______________


(1)	The effective rate is the yield as of December 31, 2019, including the effects of debt issuance costs.


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


(3)	Represents a $164 million mortgage loan bearing interest of 4.09% and a $16 million loan bearing interest at 6.25%.


(4)	At December 31, 2019, we were in compliance with all debt covenants.


(5)	At December 31, 2019, the unsecured revolving credit facility bears a floating rate at 30 day LIBOR plus 1.10%. The rate at December 31, 2019 was 2.86%.


(6)	The unsecured term loan facility bears a floating rate at 30 day LIBOR plus 1.20%. Pursuant to an interest rate swap agreement, the LIBOR rate is fixed at 2.1485% through maturity. The rate at December 31, 2019 was 3.35%.

Principal Payments

Aggregate required principal payments at December 31, 2019 are as follows (amounts in thousands):



Year	Amortization		Maturities		Total
2020	$	3,938	$	—	$	3,938
2021	4,090		—		4,090
2022	5,628		265,000		270,628
2023	7,876		—		7,876
2024	7,958		77,675		85,633
Thereafter	25,910		1,277,746		1,303,656
Total principal maturities	$	55,400	$	1,620,421	$	1,675,821

Deferred Financing Costs

Deferred financing costs, net, consisted of the following at December 31, 2019 and 2018 (amounts in thousands):



	2019			2018
Financing costs	$	25,315		$	25,315
Less: accumulated amortization	(13,863		)	(10,027		)
Total deferred financing costs, net	$	11,452		$	15,288

At December 31, 2019 and 2018, $4.2 million and $6.3 million, respectively, of net deferred financing costs associated with the unsecured revolving credit facility were included in deferred costs, net on the consolidated balance sheet.

Amortization expense related to deferred financing costs was $3.8 million, $4.1 million, and $4.7 million, for the years ended December 31, 2019, 2018 and 2017, respectively, and was included in interest expense.

Unsecured Revolving Credit and Term Loan Facility

The senior unsecured revolving credit and term loan facility (the “Facility”) has a principal amount of up to $1.365 billion which consists of a $1.1 billion revolving credit facility and a $265.0 million term loan facility. We may request the Facility be increased through one or more increases in the revolving credit facility or one or more increases in the term loan facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $1.75 billion.

The initial maturity of the unsecured revolving credit facility is August 2021. 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 0.0625% and 0.075% of the then outstanding commitments under the unsecured revolving credit facility on the first and the second extensions, respectively. The term loan facility matures on August 2022. We may prepay the loans under the Facility at any time, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of Eurodollar Rate borrowings.

The Facility includes the following financial covenants: (i) maximum leverage ratio of total indebtedness to total asset value (as defined in the agreement) 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 $1.2 billion plus 75% of net equity proceeds received by the Operating Partnership (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 the Operating Partnership shall not have increased its net worth as a result of any such proceeds), (iv) adjusted EBITDA (as defined in the 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, and (vi) the ratio of total unsecured indebtedness to unencumbered asset value will not exceed 60%.

The Facility contains customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates, and requires certain customary financial reports. The 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 agreement for the Facility).

As of December 31, 2019, we were in compliance with the covenants under the Facility.

Senior Unsecured Notes Exchangeable

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. The 2.625% Exchangeable Senior Notes were exchangeable into cash, shares of Class A common stock or a combination of cash and shares of Class A common stock, at our election. On August 15, 2019, we settled the principal amount of the 2.625% Exchangeable Senior Notes in cash.

For the years ended December 31, 2019, 2018 and 2017, total interest expense related to the 2.625% Exchangeable Senior Notes was $6.1 million, $9.9 million and $9.9 million, respectively, consisting of (i) contractual interest expense of $4.1 million, $6.6 million and $6.6 million, respectively, (ii) additional non-cash interest expense of $1.6 million, $2.7 million and $2.7 million, respectively, related to the accretion of the debt discount, and (iii) amortization of deferred financing costs of $0.4 million, $0.6 million and $0.6 million, respectively.

Senior Unsecured Notes

The terms of the Series A, B, C, D, E, and F senior notes agreements include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. It also 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, and a maximum unsecured leverage ratio. As of December 31, 2019, we were in compliance with the covenants under the outstanding Senior Unsecured Notes.