Borrowing Arrangements

9 Months Ended

Sep. 30, 2020

Notes Payable

Our mortgage notes payable is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our mortgage notes payable:


	As of September 30, 2020						As of December 31, 2019
(amounts in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes payable, excluding deferred financing costs	$	2,681,820	$	2,479,066	$	2,227,185	$	2,072,416

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 September 30, 2020, was approximately 4.2% per annum. The debt bears interest at stated rates ranging from 2.5% to 8.9% per annum and matures on various dates ranging from 2022 to 2041. The debt encumbered a total of 114 and 116 of our Properties as of September 30, 2020 and December 31, 2019, respectively, and the gross carrying value of such Properties was approximately $2,551.9 million and $2,524.7 million, as of September 30, 2020 and December 31, 2019, respectively.

2020 Activity

During the quarter ended March 31, 2020, we entered into a $275.4 million secured credit facility with Fannie Mae, maturing in 10 years and bearing a 2.7% interest rate. The facility is secured by eight MH and four RV communities. We also repaid $48.1 million of principal on three mortgage loans that were due to mature in 2020, incurring $1.0 million of prepayment penalties. These mortgage loans had a weighted average interest rate of 5.2% per annum and were secured by three MH communities.

During the quarter ended September 30, 2020, we entered into a Secured Credit Facility with Fannie Mae for $386.9 million. The loan consists of two tranches with a weighted average interest rate of 2.55% per annum and a weighted average maturity of 13.4 years. The first tranche generated proceeds of $202.0 million with an interest rate of 2.47% per annum and a maturity of 12 years. The second tranche generated proceeds of $184.9 million with an interest rate of 2.64% per annum and a maturity of 15 years. The loan is secured by ten MH communities. The net proceeds from the transaction were primarily used to repay our $200.0 million unsecured term loan scheduled to mature in 2023 and $166.8 million of secured loans scheduled to mature in 2021. The unsecured term loan had an interest rate of LIBOR plus 1.20% to 1.90% per annum and, subject to certain conditions, could be prepaid at any time without premium or penalty. In connection with the term loan, we entered into a LIBOR swap agreement allowing us to trade the variable rate of LIBOR on the term loan for a fixed interest rate of 1.85%. Our spread over LIBOR was 1.20% resulting in an all-in interest rate of 3.05% per annum. In connection with the repayment of the unsecured term loan, we terminated the associated swap agreement as disclosed in Note 9. Derivative Instruments and Hedging Activities. The secured loans had a weighted average interest rate of approximately 5.0% per annum. As part of the repayment of the loans, we incurred early debt retirement costs of $8.8 million.

2019 Activity

During the quarter ended March 31, 2019, we defeased mortgage debt of $11.2 million in conjunction with the disposition of 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 $10.8 million, excluding mortgage note premium of $0.4 million, as a result of the acquisitions that were closed during the quarter. This loan carries an interest rate of 5.5% per annum and matures in 2024.

During the quarter ended June 30, 2019, we 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 loans had a weighted average interest rate of 6.9% per annum and were secured by three MH communities and one RV community. We also assumed mortgage debt of $7.8 million, excluding mortgage note premium of $0.2 million, as a result of the acquisitions that were closed during the quarter as disclosed in Note 6. Investment in Real Estate. This loan carries an interest rate of 5.3% per annum and matures in 2022.

Unsecured Line of Credit

During the nine months ended September 30, 2020, we borrowed and paid off amounts on our unsecured Line of Credit ("LOC"), leaving a balance of $50.0 million outstanding as of September 30, 2020. As of September 30, 2020, our LOC has a

remaining borrowing capacity of $350.0 million with the option to increase the borrowing capacity by $200.0 million, subject to certain conditions. The LOC had $160.0 million outstanding at December 31, 2019.

As of September 30, 2020, we were in compliance in all material respects with the covenants in all our borrowing arrangements.