DEBT OBLIGATIONS

The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at December 31, 2012 and 2011 (in thousands):



Property / Location	December 31, 2012			December 31, 2011			Effective Interest Rate			Maturity Date
MORTGAGE DEBT:
Newtown Square/Berwyn Park/Libertyview	$	—		$	56,538		7.25	%	(a)	May-13
Southpoint III	—			1,887			7.75	%	(a)	Apr-14
Tysons Corner	93,188			94,882			5.36	%	(b)	Aug-15
Two Logan Square	89,340			89,800			7.57	%		Apr-16
Fairview Eleven Tower	22,000			22,000			4.25	%		Jan-17
IRS Philadelphia Campus	197,111			202,905			7.00	%		Sep-30
Cira South Garage	42,303			44,379			7.12	%		Sep-30
Principal balance outstanding	443,942			512,391
Plus: fair market value premiums (discounts), net	(968		)	(1,330		)
Total mortgage indebtedness	$	442,974		$	511,061
UNSECURED DEBT:
Prior Term Loan	—			37,500			LIBOR + 0.80%		(c)	Feb-12
Prior Revolving Credit Facility	—			275,500			LIBOR + 0.725%		(c)	Feb-12
New Credit Facility	69,000			—			LIBOR + 1.50%		(c)	Feb-16
Three-Year Term Loan - Swapped to fixed	150,000			—			2.60	%	(c)	Feb-15
Four-Year Term Loan	100,000			—			LIBOR + 1.75%		(c)	Feb-16
Seven-Year Term Loan - Swapped to fixed	200,000			—			3.62	%	(c)	Feb-19
$300.0M 5.750% Guaranteed Notes due 2012	—			151,491			5.73	%	(d)	Apr-12
$250.0M 5.400% Guaranteed Notes due 2014	238,379			242,681			5.53	%		Nov-14
$250.0M 7.500% Guaranteed Notes due 2015	166,535			227,329			7.76	%	(e)	May-15
$250.0M 6.000% Guaranteed Notes due 2016	150,429			250,000			5.95	%	(e)	Apr-16
$300.0M 5.700% Guaranteed Notes due 2017	300,000			300,000			5.68	%		May-17
$325.0M 4.950% Guaranteed Notes due 2018	325,000			325,000			5.13	%		Apr-18
$250.0M 3.950% Guaranteed Notes due 2023	250,000			—			4.02	%	(e)	Feb-23
Indenture IA (Preferred Trust I)	27,062			27,062			2.75	%		Mar-35
Indenture IB (Preferred Trust I)	25,774			25,774			3.30	%		Apr-35
Indenture II (Preferred Trust II)	25,774			25,774			3.09	%		Jul-35
Principal balance outstanding	2,027,953			1,888,111
plus: original issue premium (discount), net	(5,597		)	(5,177		)
Total unsecured indebtedness	$	2,022,356		$	1,882,934
Total Debt Obligations	$	2,465,330		$	2,393,995


(a)	On December 28, 2012, the Company prepaid the remaining balances of the loans, incurring associated prepayment penalties of $0.1 million.


(b)	This loan was assumed upon acquisition of the related property. The interest rate reflects the market rate at the time of acquisition.

(c)

On February 1, 2012, the Company closed on a new $600.0 million four-year unsecured credit facility and three unsecured term loans (the "New Term Loans") totaling $600.0 which consist of a $150.0 million three-year loan, a $250.0 million four-year loan (with $150.0 million swapped to fixed) and a $200.0 million seven-year loan. The Company used a portion of the net proceeds from the New Term Loans to repay all balances outstanding under its prior revolving credit facility and its prior $183.0 million bank term loan which were then retired prior to their scheduled June 29, 2012 maturity. On December 31, 2012, the Company repaid the entire portion of the four-year loan that was swapped to fixed (see related discussion below).


(d)	Notes matured on April 1, 2012, and were repaid using a portion of the proceeds from the term loans.


(e)	On December 18, 2012, the Company issued new 3.95% $250.0 million Guaranteed Notes due 2023. The Company used the net proceeds from this debt offering to redeem portions of its 7.500% Guaranteed Notes due May 15, 2015 and 6.000% Guaranteed Notes due April 1, 2016 (see related discussion below).

During 2012, 2011, and 2010, the Company’s weighted-average effective interest rate on its mortgage notes payable was 6.65% , 6.72%, and 6.59%, respectively. As of December 31, 2012 and 2011, the net carrying value of the Company's Properties that are encumbered by mortgage indebtedness was $591.3 million and $678.0 million, respectively.

During the year-ended December 31, 2012, the Company repurchased $165.0 million of its outstanding unsecured Notes in a series of transactions that are summarized in the following table (in thousands):



Notes	Repurchase Amount		Principal		Loss		Deferred Financing Amortization
2012 5.750% Notes	$	309	$	301	$	2	$	—
2014 5.400% Notes	4,630		4,302		264		8
2015 7.500% Notes	69,549		60,794		8,712		183
2016 6.000% Notes	113,942		99,571		12,961		260
	$	188,430	$	164,968	$	21,939	$	451

The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness.

The Company utilizes its unsecured new revolving credit facility (the "New Credit Facility") for potential borrowings and for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. The maturity date of the New Credit Facility in place at December 31, 2012 is February 1, 2016. The per annum variable interest rate on the outstanding balances is LIBOR plus 1.50%. The interest rate and facility fee are subject to adjustment upon a change in the Company’s unsecured debt ratings. As of December 31, 2012, the Company had $69.0 million of borrowings, with $0.9 million in letters of credit outstanding, leaving $530.1 million of unused availability under the New Credit Facility. During the years ended December 31, 2012 and 2011, the weighted-average interest rate on the respective credit facility borrowings was 1.02% and 0.99%, respectively. As of December 31, 2012 and 2011, the weighted average interest rate on the respective credit facility was 2.83% and 1.01%, respectively.

The Company has the option to increase the amounts available to be advanced under the New Credit Facility, the $150.0 million three-year term loan, and the $100.0 million four-year term loan by an aggregate of $200.0 million, subject to customary conditions and limitations, by obtaining additional commitments from the current lenders and other financial institutions. The Company also has the option to extend the maturity dates of each of the New Credit Facility, the $150.0 million three-year term loan and the $100.0 million four-year term loan by one year, subject to payment of an extension fee and other customary conditions and limitations. The $150.0 million three-year term and the $100.0 million four-year term loans can be prepaid by the Company at any time without penalty. The $200.0 million seven-year term loan is subject to a declining prepayment penalty (3.00% commencing one year after closing, 2.00% after two years, 1.00% after three years and without penalty thereafter).

The spread to LIBOR for LIBOR-based loans under the New Credit Facility and New Term Loans will depend on the Company's unsecured senior debt credit rating. Based on the Company's current credit rating, the spread for such loans will be 150, 175, 175 and 190 basis points under the New Credit Facility, the $150.0 million three-year term loan, the $100.0 million four-year term loan and the $200.0 million seven-year term loan, respectively. At the Company's option, advances under the New Credit Facility and New Term Loans may also bear interest at a per annum floating rate equal to the higher of the prime rate or the federal funds rate plus 0.50% per annum. The New Credit Facility contains a competitive bid option that allows banks that are part of the lender consortium to bid to make loans to the Company at a reduced rate. The Company executed hedging transactions that fix the rate on the $200.0 million seven-year term loan at a 3.623% average rate for its full term, and the rate on the $150.0 million three-year term loan at a 2.596% average rate for periods of three to four years. All hedges commenced on February 1, 2012 and the rates are inclusive of the LIBOR spread based on our current investment grade rating. See Note 9 for details of the interest rate swaps entered into as of December 31, 2012.

The New Credit Facility and New Term Loans contain financial and operating covenants and restrictions. The Company was in compliance with all such restrictions and financial covenants as of December 31, 2012.

On December 18, 2012, the Company closed a registered offering of $250.0 million in aggregate principal amount of its 3.95% Guaranteed Notes due 2023. The notes were priced at 99.273% of their face amount with a yield to maturity of 4.037%, representing a spread at the time of pricing of 2.35%. The notes have been reflected net of discount of $1.8 million in the consolidated balance sheet as of December 31, 2012. The Company used a portion of the net proceeds from this offering, which amounted to $246.1 million after deducting underwriting discounts and offering expenses, to fund its repurchase, through a tender offer, of the Company's 7.50% Guaranteed Notes due May 15, 2015 and 6.00% Guaranteed Notes due April 1, 2016.

On December 27, 2012, in connection with the aforementioned offering, the Company funded tender offers for $50.3 million of its 7.50% Guaranteed Notes due 2015, and $99.6 million of its 6.00% Guaranteed Notes due 2016. The Company funded the total tender offer consideration of $171.5 million from net proceeds of the registered offering, as well as available cash balances, with the Company recognizing a $20.4 million loss on early extinguishment of debt related to the total repurchase.

On December 31, 2012, the Company repaid the entire $150.0 million remaining fixed portion of its four-year term loan due February 1, 2016. In connection with this repayment, the Company also incurred a $3.0 million charge on the termination of associated interest rate swap contracts, as reflected in the Company's consolidated statements of operations. Please refer to Footnote 9 for further information related to the termination of the interest rate swap contracts.

As of December 31, 2012, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, were as follows (in thousands):



2013	$	11,237
2014	250,321
2015	416,568
2016	416,038
2017	330,323
Thereafter	1,047,408
Total principal payments	2,471,895
Net unamortized premiums/(discounts)	(6,565		)
Outstanding indebtedness	$	2,465,330