Debt

The following table summarizes our mortgages and notes payable and capital lease obligation as of June 30, 2014 and December 31, 2013:



Notes Payable	June 30, 2014		December 31, 2013
	(In thousands)
Senior unsecured notes	$	210,000	$	110,000
Unsecured term loan facilities	210,000		255,000
Fixed rate mortgages	298,203		329,875
Unsecured revolving credit facility	—		27,000
Junior subordinated notes	28,125		28,125
	746,328		750,000
Unamortized premium	2,826		3,174
	$	749,154	$	753,174

Capital lease obligation ⁽¹⁾	$	5,510	$	5,686


⁽¹⁾	99 year ground lease expires 9/30/2103. However, an anchor tenant’s exercise of its option to purchase its parcel in October 2014 would require us to purchase the real estate that is subject to the ground lease.

In May 2014, we completed a $100 million private placement of senior unsecured notes consisting of $50 million of notes with a ten-year term with a fixed interest rate of 4.65% and $50 million of notes with a twelve-year term at a fixed interest rate of 4.74%. A "shelf" facility allows for an additional $50 million in notes to the same purchaser within the next three years, subject to approval, pricing and documentation.

Also in May 2014, we closed a $75 million senior unsecured term loan with an additional $75 million accordion feature. The loan has a seven-year term and bears interest at an annual rate of LIBOR plus 1.25% to 2.25% (initially 1.7%) depending upon our leverage or credit rating. The interest expense will be hedged with an existing interest rate swap expiring in April 2016, resulting in an effective fixed initial annual rate of 2.9%.

The combined proceeds from these financings were used to repay $45 million of variable-rate bank term debt due 2017, $75 million of bank term debt also due in 2017, the $45 million balance on our unsecured revolving line of credit, as well as for general corporate purposes.

During the six months ended June 30, 2014 we repaid mortgages securing the following properties:


•	The Auburn Mile in the amount of $6.6 million with an interest rate of 5.4%; and


•	Crossroads Centre in the amount of $23.2 million with an interest rate of 5.4%.

Our fixed rate mortgages have interest rates ranging from 5.0% to 7.4% and are due at various maturity dates from June 2015 through June 2026. Included in fixed rate mortgages at June 30, 2014 and December 31, 2013 were unamortized premium balances related to the fair market value of debt of approximately $2.8 million and $3.2 million, respectively. The fixed rate mortgage notes are secured by mortgages on properties that have an approximate net book value of $283.3 million as of June 30, 2014.

We had net repayments of $27.0 million under our revolving credit facility during the six months ended June 30, 2014. As of June 30, 2014 there were no amounts outstanding under the facility. Outstanding letters of credit issued under our revolving credit facility, not reflected in the accompanying condensed consolidated balance sheets, totaled $7.0 million. These letters of credit reduce borrowing availability under our bank facility.

Our revolving credit facility, term loans and unsecured notes contain financial covenants relating to total leverage, fixed charge coverage ratio, unencumbered assets, tangible net worth and various other calculations. As of June 30, 2014, we were in compliance with these covenants.

The mortgage loans encumbering our properties, including properties held by our unconsolidated joint ventures, are generally nonrecourse, subject to certain exceptions for which we would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a material misrepresentation, misstatement or omission by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly and certain environmental liabilities. In addition, upon the occurrence of certain events, such as fraud or filing of a bankruptcy petition by the borrower, we or our joint ventures would be liable for the entire outstanding balance of the loan, all interest accrued thereon and certain other costs, including penalties and expenses.

We have entered into mortgage loans which are secured by multiple properties and contain cross-collateralization and cross-default provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan.

The following table presents scheduled principal payments on mortgages and notes payable as of June 30, 2014:



Year Ending December 31,
	(In thousands)
2014 (July 1 - December 31)	$	1,784
2015	85,250
2016	22,710
2017	112,222
2018	84,244
Thereafter	440,118
Subtotal debt	746,328
Unamortized premium	2,826
Total debt (including unamortized premium)	$	749,154

We have no mortgage maturities until the second quarter of 2015 and it is our intent to repay these mortgages using cash, borrowings under our unsecured line of credit, or other sources of financing.