Debt

Non-Recourse Debt

Non-recourse debt consists of mortgage notes payable, which are collateralized by the assignment of real estate properties with an aggregate carrying value of $613.9 million and $119.3 million at December 31, 2014 and 2013, respectively. The following table presents a summary of the non-recourse mortgage loans on our real estate property investments (dollars in thousands):



					Carrying Amount at December 31,
Tenant	Interest Rate		Rate Type	Maturity Date	2014		2013
Infineon ^(a)	3.1	%	Fixed	2/28/2017	$	13,756	$	—
Albion Resorts ^(a)	6.7	%	Fixed	9/1/2019	3,136		—
Albion Resorts^(a)	7.2	%	Fixed	9/1/2019	5,592		—
Truffle/Oakbank ^{(a) (b)}	3.9	%	Variable	12/11/2019	11,401		—
Albion Resorts ^(a)	7.0	%	Fixed	1/31/2020	10,536		—
Agrokor ^(c)	5.8	%	Fixed	12/31/2020	37,038		—
Bank Pekao ^(a)	3.3	%	Fixed	3/10/2021	64,852		—
Dupont ^(a)	3.8	%	Fixed	11/1/2021	14,140		—
Gentry ^(a)	3.8	%	Fixed	11/1/2021	15,330		—
State Farm ^{(c) (d)}	4.5	%	Fixed	9/10/2023	72,800		72,800
Crowne Group Inc. ^(b) ^(c)	5.6	%	Variable	12/30/2023	11,980		12,260
Crowne Group Inc. ^{(a) (b)}	5.5	%	Variable	12/30/2023	3,987		—
St. Petersburg/Kissimmee properties ^{(a) (e)}	4.9	%	Fixed	2/1/2024	14,500		—
Automobile Protection Corporation ^{(a) (b)}	5.1	%	Variable	2/5/2024	3,752		—
Solo Cup ^{(a) (d)}	5.1	%	Fixed	2/6/2024	47,250		—
Swift Spinning Inc.^(a)	5.0	%	Fixed	5/1/2024	7,738		—
Janus ^{(a) (b)}	4.9	%	Variable	5/5/2024	11,538		—
AT&T^(a)	4.6	%	Fixed	6/11/2024	8,000		—
Self-storage - Multiple properties ^{(a) (f)}	4.4	%	Fixed	10/11/2024	23,000		—
Cooper Tire ^{(a) (b)}	4.7	%	Variable	10/31/2024	6,704		—
Barnsco Inc. ^(a)	4.5	%	Fixed	11/14/2024	5,200		—
ATK ^(a)	4.2	%	Fixed	1/6/2025	27,650		—
North American Lighting Inc.^(a)	4.8	%	Fixed	5/6/2026	7,325		—
Air Enterprises ^(a)	5.3	%	Fixed	4/1/2039	3,257		—
					$	430,462	$	85,060

__________

(a)

These debt instruments were entered into or assumed in conjunction with the 2014 Acquisitions as described in Note 4 and Note 5. During the year ended December 31, 2014, we capitalized $4.7 million of deferred financing costs related to these debt instruments. We amortize deferred financing costs over the term of the related debt instrument using a method which approximates the effective interest method.


(b)	These mortgage loans have variable interest rates, which have been effectively converted to fixed rates through the use of interest rate swaps (Note 8). The interest rates presented for these mortgage loans reflect interest rate swaps in effect at December 31, 2014.


(c)	These mortgage loans were entered into in conjunction with the 2013 Acquisitions as described in Note 4.


(d)	These mortgage loans have payments that are interest-only until their respective maturity dates.


(e)	On January 23, 2014, we entered into a mortgage loan that we allocated between our St. Petersburg Self Storage and Kissimmee Self Storage investments, which are jointly and severally liable for any possible defaults on the loan.


(f)	On October 9, 2014, we obtained a mortgage loan for $23.0 million, which was allocated to the six self-storage properties purchased from July 22, 2014 through October 9, 2014 (Note 4).

Bonds Payable

In conjunction with our Apply AS investment (Note 4), on October 31, 2014, we issued privately-placed bonds totaling $53.3 million, which is based on the exchange rate of the Norwegian krone at that date. These bonds are collateralized by the Apply AS property and have a fixed coupon of 4.4%. The bonds are coterminous with the lease and mature on October 31, 2021. Coupon payments will be made annually in arrears on October 30. At December 31, 2014, this bond had a carrying value of $48.2 million.

In conjunction with our Siemens AS investment (Note 4), on February 27, 2014, we issued privately-placed bonds totaling $52.1 million, which is based on the exchange rate of the Norwegian krone at that date. These bonds are collateralized by the Siemens AS property and have a coupon of 3.5%. The bonds are coterminous with the lease and mature on December 15, 2025. The bonds are inflation-linked to the Norwegian CPI and the annual principal balance and coupon payment will increase as that inflation index increases. During 2014, the principal balance increased by $0.7 million as a result of the Norwegian CPI fluctuation. Coupon payments will be made annually in arrears on December 15. At December 31, 2014, this bond had a carrying value of $43.1 million.

Certain of our mortgage loans and bonds have a covenant that requires compliance with a “loan to value ratio.”

Scheduled Debt Principal Payments

Scheduled debt principal payments during each of the next five calendar years following December 31, 2014 and thereafter are as follows (in thousands):



Years Ending December 31,	Total
2015	$	5,079
2016	5,863
2017	19,908
2018	7,233
2019	18,657
Thereafter through 2039	464,706
	521,446
Unamortized premium	266
Total	$	521,712

Certain amounts in the table above are based on the applicable foreign currency exchange rate at December 31, 2014. The impact on the carrying value of our Non-recourse debt and bonds payable due to the strengthening of the U.S. dollar relative to foreign currencies during 2014 was a decrease of $28.8 million from December 31, 2013 to December 31, 2014.