Borrowing Arrangements

12 Months Ended

Dec. 31, 2019

Mortgage Notes Payable

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy as of December 31, 2019 and 2018. The following table presents the fair value of our mortgage notes payable:



	As of December 31, 2019				As of December 31, 2018
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,227,185	$	2,072,416	$	2,164,563	$	2,174,715

As of December 31, 2019 and 2018, we had outstanding mortgage indebtedness on Properties of approximately $2,049.5 million and $2,149.7 million, respectively, excluding liabilities classified as held for sale and net of deferred financing costs. The weighted average interest rate on our outstanding mortgage indebtedness, including the impact of premium/discount amortization and loan cost amortization on mortgage indebtedness, as of December 31, 2019 and December 31, 2018, was approximately 4.5% and 4.7% per annum, respectively. The debt bears interest at stated rates ranging from 3.5% to 8.9% per annum and matures on various dates ranging from 2020 to 2041. The debt encumbered a total of 116 and 118 of our Properties as of December 31, 2019 and December 31, 2018, respectively, and the gross carrying value of such Properties was approximately $2,524.7 million and $2,509.5 million, as of December 31, 2019 and December 31, 2018, respectively.

2019 Activity

We defeased mortgage debt of $11.2 million in conjunction with the disposition of the five all-age MH communities as disclosed in Note 6. Investment in Real Estate. These loans had a weighted average interest rate of 5.0% per annum. We also assumed mortgage debt of $18.6 million, excluding mortgage note premium of $0.6 million, in connection with the acquisitions that were closed during the year ended December 31, 2019. These loans carry a weighted average interest rate of 5.4% per annum and mature between 2022 and 2024.

We also repaid $66.8 million of principal on four mortgage loans that were due to mature in 2020, incurring $1.4 million of prepayment penalties. These mortgage loans had a weighted average interest rate of 6.9% per annum and were secured by three MH and one RV communities.

2018 Activity

We entered into two secured credit facilities with gross proceeds of $357.8 million, with a weighted average maturity of 14.8 years and a weighted average interest rate of 4.2%. We also closed on one loan secured by two RV communities for gross proceeds of $64.0 million. The loan has a term of 20 years and carries an interest rate of 4.8% per annum. Additionally, in connection with the Serendipity acquisition, we assumed $9.2 million of debt and obtained $8.8 million of additional financing for a total of $18.0 million, secured by the MH community. The debt carries a weighted average interest rate of 4.8% and matures in 2039.

We also repaid $196.8 million of principal on 16 mortgage loans (15 due to mature in 2019 and one maturing in 2018) incurring $1.9 million of prepayment penalties. These mortgage loans had a weighted average interest rate of 6.29% per annum and were secured by 15 MH and one RV communities.

2017 Activity

We entered into a $204.4 million secured credit facility with Fannie Mae, maturing in 20 years and bearing a 3.97% interest rate. The facility is secured by five MH communities. We also closed on three loans with total gross proceeds of $146.0 million. These loans have a term of 20 years, carry an interest rate of 4.07% per annum and are each secured by a MH community. Additionally, in connection with the Paradise Park Largo acquisition, we assumed $5.9 million of debt secured by the MH community, with an interest rate of 4.60% per annum, which is set to mature in 2040.

We also repaid $227.5 million of principal on 15 mortgage loans (13 due to mature in 2018 and two maturing in 2017) incurring $2.7 million of prepayment penalties. These mortgage loans had a weighted average interest rate of 5.93% per annum and were secured by 13 MH and two RV communities.

Second Amended and Restated Unsecured Credit Facility

During the year ended December 31, 2017, we entered into a Second Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, as the administrative agent, and other lenders named therein, which amended and restated the terms of the obligations owed by us under the Amended, Restated and Consolidated Credit Agreement dated as of July 17, 2014, pursuant to which we have access to a $400.0 million unsecured Line of Credit (the “LOC”) and entered into a $200.0 million senior unsecured term loan (the “Term Loan”). The LOC maturity date was extended to October 27, 2021, and this term can be extended an additional year in two six-month increments, subject to certain conditions. The LOC bears interest at a rate of LIBOR plus 1.10% to 1.55% and requires an annual facility fee of 0.15% to 0.35%. The spread over LIBOR varies quarterly based on leverage measured throughout the loan term. In 2017, we incurred commitment and arrangement fees of approximately $3.7 million to extend the LOC and enter into the Term Loan, as discussed below.

Unsecured Line of Credit

During the year ended December 31, 2019, we paid off and borrowed amounts on our LOC, leaving a balance of $160.0 million outstanding as of December 31, 2019. As of December 31, 2019, our LOC has a remaining borrowing capacity of $240.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions. The LOC had no outstanding balance as of December 31, 2018.

Term Loan

Our $200.0 million unsecured Term Loan matures on April 27, 2023 and has an interest rate of LIBOR plus 1.20% to 1.90% per annum and, subject to certain conditions, may be prepaid at any time without premium or penalty. The spread over LIBOR varies quarterly based on leverage measured throughout the loan term. The Term Loan contains customary representations, warranties, and negative and affirmative covenants, and provides for acceleration of principal and payment of all other amounts payable thereunder upon the occurrence of certain events of default. In connection with the Term Loan, as amended under the Second Amended and Restated Credit Agreement, we also entered into a three-year LIBOR Swap Agreement (the "2017 Swap") allowing us to trade the variable interest rate for a fixed interest rate on the Term Loan. See Note 10. Derivative Instruments and Hedging Activities for further discussion.

Future Maturities of Debt

The following table presents the aggregate scheduled payments of principal on long-term borrowings for each of the next five years and thereafter as of December 31, 2019:



(amounts in thousands)	Amount
2020	$	102,942
2021	218,780
2022	187,653
2023	341,796
2024	60,856
Thereafter	1,359,279
Net unamortized premiums	1,110
Unamortized deferred financing costs	(23,958		)
Total	$	2,248,458

As of December 31, 2019, we were in compliance in all material respects with the covenants in our borrowing arrangements.