DEBT

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt Disclosure

DEBT

The Company’s debt is detailed below:

	March 31, 2022		December 31, 2021
	(In thousands)
Unsecured bank credit facilities - variable rate, carrying amount	$	197,313	209,210
Unamortized debt issuance costs	(1,996)		(2,144)
Unsecured bank credit facilities, net of debt issuance costs	195,317		207,066
Unsecured debt - fixed rate, carrying amount (1)	1,270,000		1,245,000
Unamortized debt issuance costs	(2,916)		(2,430)
Unsecured debt, net of debt issuance costs	1,267,084		1,242,570
Secured debt - fixed rate, carrying amount (1)	2,128		2,156
Unamortized debt issuance costs	(13)		(14)
Secured debt, net of debt issuance costs	2,115		2,142
Total debt, net of debt issuance costs	$	1,464,516	1,451,778

(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.

Until June 29, 2021, EastGroup had $350 million and $45 million unsecured bank credit facilities with margins over London Interbank Offered Rate (“LIBOR”) of 100 basis points, facility fees of 20 basis points and maturity dates of July 30, 2022. The Company amended and restated these credit facilities on June 29, 2021, expanding their capacities to $425 million and $50 million, respectively, as detailed below.

The $425 million unsecured bank credit facility is with a group of nine banks and has a maturity date of July 30, 2025. The credit facility contains options for two six-month extensions (at the Company's election) and a $325 million accordion (with agreement by all parties). The interest rate on each tranche is reset on a monthly basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the Company had $183,000,000 of variable rate borrowings on this unsecured bank credit facility with a weighted average interest rate of 1.168%.

The Company's $50 million unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $425 million facility are exercised. The interest rate is reset on a daily basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the interest rate was 1.227% on a balance of $14,313,000.

For both facilities, the margin and facility fee are subject to changes in the Company's credit ratings. Although the Company’s current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%. The facilities also include a sustainability-linked pricing component pursuant to which the applicable interest margin will be reduced by one basis point if the Company meets certain sustainability performance targets.

In February 2022, EastGroup repaid a $75 million unsecured term loan at maturity with an effectively fixed interest rate of 3.03%.

In March 2022, the Company closed a $100 million senior unsecured term loan with a 6.5 year term and interest only payments, which bears interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin (1.30% as of March 31, 2022) based on the Company’s senior unsecured long-term debt rating. The Company also entered into an interest rate swap agreement to convert the loan’s LIBOR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed interest rate of 3.06%.

Also during March 2022, the Company closed on the refinance of a $100 million senior unsecured term loan with 5 years remaining. The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 85 basis points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 60 basis point reduction in the credit spread compared to the original term loan. The Company has an interest rate swap agreement which converts the loan’s

SOFR rate component to a fixed interest rate for the entire term of the loan, providing a total effectively fixed interest rate of 1.80%.

Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs), as of March 31, 2022, are as follows: 

Years Ending December 31,	(In thousands)
2022 - Remainder of year	$	87
2023	115,119
2024	120,122
2025	145,128
2026	141,672
2027 and beyond	750,000
Total	$	1,272,128