Senior Unsecured Notes and Secured Debt

6 Months Ended

Jun. 30, 2024

At June 30, 2024, the annual principal payments due on our debt obligations were as follows (in thousands):


	Senior Unsecured Notes (1,2)		Secured Debt (3)		Totals
2024	$	—	$	106,622	$	106,622
2025	1,260,000		319,175		1,579,175
2026	700,000		151,137		851,137
2027 (4,5)	1,901,929		182,536		2,084,465
2028 (6)	2,480,200		102,640		2,582,840
Thereafter (7)	5,982,000		938,574		6,920,574
Total principal balance	12,324,129		1,800,684		14,124,813
Unamortized discounts and premiums, net	(24,484)		—		(24,484)
Unamortized debt issuance costs, net	(65,257)		(16,542)		(81,799)
Fair value adjustments and other, net	(64,613)		(18,150)		(82,763)
Total carrying value of debt	$	12,169,775	$	1,765,992	$	13,935,767

(1) Annual interest rates range from 2.05% to 6.50%. The ending weighted average interest rate, after considering the effects of interest rate swaps, was 3.94% and 4.00% as of June 30, 2024 and June 30, 2023, respectively.

(2) All senior unsecured notes with the exception of the $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 have been issued by Welltower OP and are fully and unconditionally guaranteed by Welltower. The $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 have been issued through private placement by a wholly-owned subsidiary of Welltower OP and are fully and unconditionally guaranteed by Welltower OP.

(3) Annual interest rates range from 1.31% to 8.13%. The ending weighted average interest rate, after considering the effects of interest rate swaps and caps, was 4.64% and 4.70% as of June 30, 2024 and June 30, 2023, respectively. Gross real property value of the properties securing the debt totaled $4,966,345,000 at June 30, 2024.

(4) Includes a $1,000,000,000 unsecured term loan and a $250,000,000 Canadian-denominated unsecured term loan (approximately $182,695,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2024). Both term loans mature on July 19, 2026 and may be extended for two successive terms of six months at our option. The loans bear interest at adjusted SOFR plus 0.85% (6.28% at June 30, 2024) and adjusted Canadian Overnight Repo Rate Average plus 0.85% (5.93% at June 30, 2024), respectively.

(5) Includes a $300,000,000 Canadian-denominated 2.95% senior unsecured notes due 2027 (approximately $219,234,000 based on the Canadian/U.S. Dollar exchange rate on June 30, 2024).

(6) Includes a £550,000,000 4.80% senior unsecured notes due 2028 (approximately $695,200,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on June 30, 2024).

(7) Includes a £500,000,000 4.50% senior unsecured notes due 2034 (approximately $632,000,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on June 30, 2024).

The following is a summary of our senior unsecured notes principal activity during the periods presented (dollars in thousands):


	Six Months Ended
	June 30, 2024		June 30, 2023
Beginning balance	$	13,699,619	$	12,584,529
Debt issued	—		1,035,000
Debt extinguished	(1,350,000)		—

Foreign currency	(25,490)		75,575
Ending balance	$	12,324,129	$	13,695,104

Welltower, the parent entity that consolidates Welltower OP and all other subsidiaries, fully and unconditionally guarantees to each holder of all series of senior unsecured notes issued by Welltower OP that the principal of and premium, if any, and interest on the notes will be promptly paid in full when due, whether at the applicable maturity date, by acceleration or redemption or otherwise, and interest on the overdue principal of and interest on the notes, if any, if lawful, and all other obligations of Welltower OP to the holders of the notes will be promptly paid in full or performed. Welltower's guarantees of such notes are its senior unsecured obligation and rank equally with all of Welltower's other future unsecured senior indebtedness and guarantees from time to time outstanding. Welltower's guarantees of such notes are effectively subordinated to all liabilities of its subsidiaries and to its secured indebtedness to the extent of the assets securing such indebtedness. Because Welltower conducts substantially all of its business through its subsidiaries, Welltower's ability to make required payments with respect to the guarantees depends on the financial results and condition of its subsidiaries and its ability to receive funds from its subsidiaries, whether by dividends, loans, distributions or other payments.

We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, subject to certain contractual restrictions, at a redemption price equal to the sum of: (i) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (ii) any "make-whole" amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Exchangeable Senior Unsecured Notes

In May 2023, Welltower OP issued $1,035,000,000 aggregate principal amount of 2.750% exchangeable senior unsecured notes maturing May 15, 2028 (the "2028 Exchangeable Notes") unless earlier exchanged, purchased or redeemed. The 2028 Exchangeable Notes will pay interest semi-annually in arrears on May 15 and November 15 of each year. We recognized contractual interest expense on the Exchangeable Notes of approximately $7,116,000 and $14,232,000 for the three and six months ended June 30, 2024, and $3,953,000 for the same periods in 2023, respectively. Additionally, amortization of related issuance costs were $1,167,000 and $2,332,000 for the three and six ended June 30, 2024, and $693,000 for the same periods in 2023, respectively. Unamortized issuance costs were $17,958,000 as of June 30, 2024 and $20,245,000 as of December 31, 2023.

In July 2024, Welltower OP issued $1,035,000,000 aggregate principal amount of 3.125% exchangeable senior unsecured notes maturing July 15, 2029 (the "2029 Exchangeable Notes") unless earlier exchanged, purchased or redeemed. The 2029 Exchangeable Notes will pay interest semi-annually in arrears on January 15 and July 15 of each year.

The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):


	Six Months Ended
	June 30, 2024		June 30, 2023
Beginning balance	$	2,222,445	$	2,129,954

Debt issued	2,872		373,462
Debt assumed	—		73,671
Debt extinguished	(211,805)		(72,496)


Debt disposed(1)	(164,640)		—
Principal payments	(21,994)		(28,781)
Foreign currency	(26,194)		20,781
Ending balance	$	1,800,684	$	2,496,591

(1) Please see Note 5 for additional information.

Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of June 30, 2024, we were in compliance in all material respects with all of the covenants under our debt agreements.