Long-Term Debt

Long-term debt was as follows:

				September 30,		March 31,
	2016 Rate (a)	Maturities		2015		2015
				(Unaudited)
				(In thousands)
Real estate loan (amortizing term)	6.93%	2023	$	210,000	$	240,000
Senior mortgages	2.20% - 5.50%	2016 - 2038		956,129		717,512
Working capital loan (revolving credit)	1.53%	2016		25,000		–
Fleet loans (amortizing)	1.95% - 4.76%	2016 - 2022		208,644		202,784
Fleet loans (term)	3.52% - 3.53%	2016		115,000		115,000
Fleet loans (securitization)	4.90%	2017		67,801		75,846
Fleet loans (revolving credit)	1.21% - 2.05%	2017 - 2019		225,000		190,000
Capital leases (rental equipment)	2.18% - 7.84%	2016 - 2022		621,054		602,470
Other obligations	3.00% - 8.00%	2015 - 2045		54,562		47,257
Total notes, loans and leases payable			$	2,483,190	$	2,190,869

(a) Interest rate as of September 30, 2015, including the effect of applicable hedging instruments.

Real Estate Backed Loans

Real Estate Loan

Amerco Real Estate Company and certain of its subsidiaries and U-Haul Company of Florida are borrowers under a Real Estate Loan. As of September 30, 2015, the outstanding balance on the Real Estate Loan was $210.0 million. U-Haul International, Inc. is a guarantor of this loan. The Real Estate Loan requires monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. The Real Estate Loan is secured by various properties owned by the borrowers. The final maturity of the term loan is April 2023.

The interest rate, per the provisions of the amended loan agreement, is the applicable London Inter-Bank Offer Rate (“LIBOR”) plus the applicable margin. At September 30, 2015, the applicable LIBOR was 0.21% and the applicable margin was 1.50%, the sum of which was 1.71%. The rate on the Real Estate Loan is hedged with an interest rate swap fixing the rate at 6.93% based on current margin. The interest rate swap expires in August 2018, after this date the remaining balance will incur interest at a rate of LIBOR plus a margin of 1.50%. The default provisions of the Real Estate Loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Senior Mortgages

Various subsidiaries of Amerco Real Estate Company and U-Haul International, Inc. are borrowers under certain senior mortgages. These senior mortgage loan balances as of September 30, 2015 were in the aggregate amount of $956.1 million and mature between 2016 and 2038. The senior mortgages require monthly principal and interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. The senior mortgages are secured by certain properties owned by the borrowers. The fixed interest rates, per the provisions of the senior mortgages, range between 4.22% and 5.50%. Additionally, $139.6 million of these loans have variable interest rates comprised of applicable LIBOR base rates between 0.20% and 0.21% plus margins between 2.00% and 2.50%, the sum of which was between 2.20% and 2.71%. Amerco Real Estate Company and U-Haul International, Inc. have provided limited guarantees of the senior mortgages. The default provisions of the senior mortgages include non-payment of principal or interest and other standard reporting and change-in-control covenants. There are limited restrictions regarding our use of the funds.

Working Capital Loans

Amerco Real Estate Company is a borrower under an asset backed working capital loan. The maximum amount that can be drawn at any one time is $25.0 million. At September 30, 2015 the outstanding balance was $25.0 million. This loan is secured by certain properties owned by the borrower. This loan agreement provides for revolving loans, subject to the terms of the loan agreement. This agreement matures in April 2016. This loan requires monthly interest payments with the unpaid loan balance and accrued and unpaid interest due at maturity. U-Haul International, Inc. and AMERCO are the guarantors of this loan. The default provisions of the loan include non-payment of principal or interest and other standard reporting and change-in-control covenants. The interest rate is the applicable LIBOR of 0.28% plus a margin of 1.25% the sum of which was 1.53%.

Fleet Loans

Rental Truck Amortizing Loans

U-Haul International, Inc. and several of its subsidiaries are borrowers under amortizing term loans. The balance of the loans as of September 30, 2015 was $208.6 million with the final maturities between April 2016 and July 2022.

The Amortizing Loans require monthly principal and interest payments, with the unpaid loan balance and accrued and unpaid interest due at maturity. These loans were used to purchase new trucks. The interest rates, per the provision of the Loan Agreements, are the applicable LIBOR plus the applicable margins. At September 30, 2015, the applicable LIBOR was between 0.20% and 0.21% and applicable margins were between 1.72% and 2.50%. The interest rates are hedged with interest rate swaps fixing the rates between 2.82% and 4.76% based on current margins. Additionally, $120.6 million of these loans are carried at fixed rates ranging between 1.95% and 3.94%.

AMERCO and U-Haul International, Inc. are guarantors of these loans. The default provisions of these loans include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Rental Truck Term Loans

A subsidiary of U-Haul International, Inc. is a borrower under term loans with an aggregate balance of $115.0 million that were used to fund new truck acquisitions. The final maturity date of these notes is August 2016. The agreements contain options to extend the maturity through May 2017. These notes are secured by the purchased equipment and the corresponding operating cash flows associated with their operation. These notes have fixed interest rates between 3.52% and 3.53%. At September 30, 2015, the aggregate outstanding balance was $115.0 million.

Rental Truck Securitizations

2010 U-Haul S Fleet and its subsidiaries (collectively, “2010 USF”) issued a $155.0 million asset-backed note (“2010 Box Truck Note”) on October 28, 2010. 2010 USF is a bankruptcy-remote special purpose entity wholly-owned by U-Haul International, Inc. The net proceeds from the securitized transaction were used to finance new box truck purchases. U.S. Bank, NA acts as the trustee for this securitization.

The 2010 Box Truck Note has a fixed interest rate of 4.90% with an expected final maturity of October 2017. At September 30, 2015, the outstanding balance was $67.8 million. The note is secured by the box trucks purchased and the corresponding operating cash flows associated with their operation.

The 2010 Box Truck Note is subject to certain covenants with respect to liens, additional indebtedness of the special purpose entity, the disposition of assets and other customary covenants of bankruptcy-remote special purpose entities. The default provisions of this note include non-payment of principal or interest and other standard reporting and change-in-control covenants.

Rental Truck Revolvers

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $75 million, which can be increased to a maximum of $225 million. The loan matures in September 2018. The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus the applicable margin. At September 30, 2015, the applicable LIBOR was 0.20% and the margin was 1.75%, the sum of which was 1.95%. Only interest is paid during the first four years of the loan with principal due monthly over the last nine months. As of September 30, 2015, the outstanding balance was $75.0 million.

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $100 million, which can be increased to a maximum of $125 million. The loan matures in October 2017. The interest rate, per the provision of the Loan Agreement, is the applicable LIBOR plus the applicable margin. At September 30, 2015, the applicable LIBOR was 0.21% and the margin was 1.00%, the sum of which was 1.21%. Only interest is paid during the first three years of the loan with principal due monthly over the last nine months. As of September 30, 2015, the outstanding balance was $100.0 million.

Various subsidiaries of U-Haul International, Inc. entered into a revolving fleet loan for $70 million. The loan matures in May 2019. This agreement contains an option to extend the maturity through February 2020. At September 30, 2015, the applicable LIBOR was 0.20% and the margin was 1.85%, the sum of which was 2.05%. Only interest is paid during the first five years of the loan with principal due upon maturity. As of September 30, 2015, the outstanding balance was $50.0 million.

Capital Leases

We regularly enter into capital leases for new equipment with the terms of the leases between 5 and 7 years. At September 30, 2015, the balance of these leases was $621.1 million. The net book value of the corresponding capitalized assets was $795.8 million at September 30, 2015.

Other Obligations

In February 2011, the Company and US Bank, National Association (the “Trustee”) entered into the
U-Haul Investors Club Indenture. The Company and the Trustee entered into this indenture to provide for the issuance of notes by us directly to investors over our proprietary website, uhaulinvestorsclub.com
(“U-Notes”). The U-Notes are secured by various types of collateral including rental equipment and real estate. U-Notes are issued in smaller series that vary as to principal amount, interest rate and maturity. U-Notes are obligations of the Company and secured by the associated collateral; they are not guaranteed by any of the Company’s affiliates or subsidiaries.

At September 30, 2015, the aggregate outstanding principal balance of the U-Notes issued was $60.7 million of which $6.1 million is held by our insurance subsidiaries and eliminated in consolidation. Interest rates range between 3.00% and 8.00% and maturity dates range between 2015 and 2045.

Annual Maturities of Notes, Loans and Leases Payable

The annual maturities of long-term debt as of September 30, 2015 for the next five years and thereafter are as follows:

		Twelve Months Ending September 30,
		2016		2017		2018		2019		2020		Thereafter
		(Unaudited)
		(In thousands)
Notes, loans and leases payable, secured	$	379,610	$	430,008	$	350,953	$	275,164	$	171,028	$	876,427

Interest on Borrowings

Interest Expense

Components of interest expense include the following:

		Quarter Ended September 30,
		2015		2014
		(Unaudited)
		(In thousands)
Interest expense	$	20,762	$	20,658
Capitalized interest		(871)		(220)
Amortization of transaction costs		748		801
Interest expense resulting from derivatives		3,334		3,638
Total interest expense		23,973		24,877
Write-off of transaction costs related to early extinguishment of debt		–		298
Fees on early extinguishment of debt		–		3,783
Fees and amortization on early extinguishment of debt		–		4,081
Total	$	23,973	$	28,958

		Six Months Ended September 30,
		2015		2014
		(Unaudited)
		(In thousands)
Interest expense	$	39,304	$	40,579
Capitalized interest		(1,422)		(387)
Amortization of transaction costs		1,491		1,554
Interest expense resulting from derivatives		6,700		7,279
Total interest expense		46,073		49,025
Write-off of transaction costs related to early extinguishment of debt		–		298
Fees on early extinguishment of debt		–		3,783
Fees and amortization on early extinguishment of debt		–		4,081
Total	$	46,073	$	53,106

Interest paid in cash, including payments related to derivative contracts, amounted to $22.6 million and $24.1 million for the second quarter of fiscal 2016 and 2015, respectively and $44.6 million and $47.5 million for the first six months of fiscal 2016 and 2015, respectively.

The costs associated with the early extinguishment of debt in the second quarter of fiscal 2015 included $3.8 million of fees and $0.3 million of transaction cost amortization related to retired debt.

Interest Rates

Interest rates and Company borrowings were as follows:

		Revolving Credit Activity
		Quarter Ended September 30,
		2015		2014
		(Unaudited)
		(In thousands, except interest rates)
Weighted average interest rate during the quarter		1.63%		1.76%
Interest rate at the end of the quarter		1.63%		1.61%
Maximum amount outstanding during the quarter	$	250,000	$	232,000
Average amount outstanding during the quarter	$	234,348	$	202,977
Facility fees	$	50	$	81

		Revolving Credit Activity
		Six Months Ended September 30,
		2015		2014
		(Unaudited)
		(In thousands, except interest rates)
Weighted average interest rate during the period		1.64%		1.76%
Interest rate at the end of the period		1.63%		1.61%
Maximum amount outstanding during the period	$	250,000	$	232,000
Average amount outstanding during the period	$	207,678	$	172,740
Facility fees	$	144	$	198