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Notes and Bonds Payable
 12 Months Ended
Dec. 31, 2013
Debt Disclosure [Abstract]  
Notes and Bonds Payable
Notes and Bonds Payable
The table below details the Company’s notes and bonds payable. 
 
December 31,
Maturity
Dates
 
Contractual
Interest Rates

 
Principal
Payments
 
Interest
Payments
(Dollars in thousands)
2013

 
2012

 
 
Unsecured Credit Facility
$
238,000

 
110,000

4/17
 
LIBOR + 1.40%

 
At maturity
 
Quarterly
Senior Notes due 2014, net of discount
—

 
264,522

4/14
 
5.125
%
 
At maturity
 
Semi-Annual
Senior Notes due 2017, net of discount
299,008

 
298,728

1/17
 
6.500
%
 
At maturity
 
Semi-Annual
Senior Notes due 2021, net of discount
397,578

 
397,307

1/21
 
5.750
%
 
At maturity
 
Semi-Annual
Senior Notes due 2023, net of discount
248,077

 
—

4/23
 
3.750
%
 
At maturity
 
Semi-Annual
Mortgage notes payable, net of discount and including premiums
165,796

 
222,487

11/14-10/30
 
5.00%-7.63%

 
Monthly
 
Monthly
 
$
1,348,459

 
$
1,293,044

 
 
 
 
 
 
 

The Company’s various debt agreements contain certain representations, warranties, and financial and other covenants customary in such loan agreements. Among other things, these provisions require the Company to maintain certain financial ratios and minimum tangible net worth and impose certain limits on the Company’s ability to incur indebtedness and create liens or encumbrances. As of December 31, 2013, the Company was in compliance with its financial covenant provisions under its various debt instruments.
Unsecured Credit Facility due 2017
On October 14, 2011, the Company entered into a $700.0 million unsecured credit facility ("Unsecured Credit Facility") with a syndicate of 17 lenders. On February 15, 2013, the Company amended the facility to extend the original maturity date to April 14, 2017. The amendment also provides the Company with two six-month extension options that could extend the maturity date to April 14, 2018. Each option is subject to an extension fee of 0.075% of the aggregate commitments. Amounts outstanding under the Unsecured Credit Facility bear interest at LIBOR plus an applicable margin rate. The margin rate, which depends on the Company's credit ratings, ranges from 0.95% to 1.75% (1.4% as of December 31, 2013). In addition, the Company pays a facility fee per annum on the aggregate amount of commitments ranging from 0.15% to 0.35% (0.30% as of December 31, 2013). In connection with the amendment, the Company paid up-front fees to the lenders of approximately $2.7 million, which will be amortized over the term of the facility. The Company wrote-off certain unamortized deferred financing costs of the original facility of approximately $0.3 million upon execution of the amendment. As of December 31, 2013, the Company had $238.0 million outstanding under the Unsecured Credit Facility with a weighted average interest rate of approximately 1.57% and a remaining borrowing capacity of approximately $462.0 million.
Senior Notes due 2014 Redemption
On April 18, 2013, the Company redeemed its unsecured senior notes due 2014 (the "Senior Notes due 2014") at a redemption price equal to the aggregate of $277.3 million, consisting of outstanding principal of $264.7 million, accrued interest as of the redemption date of $0.7 million, and a "make-whole" amount of approximately $11.9 million for the early extinguishment of debt. The Senior Notes due 2014, issued in 2004, bore an interest rate at 5.125% per annum and were due to mature on April 1, 2014. The unaccreted discount of approximately $0.2 million and deferred financing costs of approximately $0.2 million were written off upon redemption. The Company recognized a loss on early extinguishment of debt of approximately $12.3 million related to the redemption. The following table reconciles the balance of the Senior Notes due 2014 on the Company's Consolidated Balance Sheets as of December 31, 2013 and 2012:
 
December 31,
(Dollars in thousands)
2013

 
2012

Senior Notes due 2014 face value
$
—

 
$
264,737

Unaccreted discount
—

 
(215
)
Senior Notes due 2014 carrying amount
$
—

 
$
264,522


Senior Notes due 2017
On December 4, 2009, the Company publicly issued $300.0 million of unsecured senior notes due 2017 (the "Senior Notes due 2017"). The Senior Notes due 2017 bear interest at 6.50%, payable semi-annually on January 17 and July 17, and are due on January 17, 2017, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $2.0 million, which yielded a 6.618% interest rate per annum upon issuance. For the years ended December 31, 2013, 2012 and 2011, the Company amortized approximately $0.3 million, $0.3 million and $0.2 million, respectively, of the discount which is included in interest expense on the Company’s Consolidated Statements of Operations.

The Company's board of directors has authorized the repurchase of up to $50 million of the Company's Senior Notes due 2017 in open market transactions from time to time. The Company currently has no specific timeframe within which to purchase these notes and has no obligation to repurchase any notes prior to maturity.

The following table reconciles the balance of the Senior Notes due 2017 on the Company’s Consolidated Balance Sheets as of December 31, 2013 and 2012.  
 
December 31,
(Dollars in thousands)
2013

 
2012

Senior Notes due 2017 face value
$
300,000

 
$
300,000

Unaccreted discount
(992
)
 
(1,272
)
Senior Notes due 2017 carrying amount
$
299,008

 
$
298,728


Senior Notes due 2021
On December 13, 2010, the Company publicly issued $400.0 million of unsecured senior notes due 2021 (the "Senior Notes due 2021"). The Senior Notes due 2021 bear interest at 5.75%, payable semi-annually on January 15 and July 15, beginning July 15, 2011, and are due on January 15, 2021, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $3.2 million, which yielded a 5.855% interest rate per annum upon issuance. For the years ended December 31, 2013, 2012 and 2011, the Company amortized approximately $0.3 million, $0.3 million and $0.2 million, respectively, of the discount which is included in interest expense on the Company’s Consolidated Statement of Operations. The following table reconciles the balance of the Senior Notes due 2021 on the Company’s Consolidated Balance Sheets as of December 31, 2013 and 2012.  
 
December 31,
(Dollars in thousands)
2013

 
2012

Senior Notes due 2021 face value
$
400,000

 
$
400,000

Unaccreted discount
(2,422
)
 
(2,693
)
Senior Notes due 2021 carrying amount
$
397,578

 
$
397,307


Senior Notes due 2023
On March 26, 2013, the Company publicly issued $250.0 million of unsecured senior notes due 2023 (the "Senior Notes due 2023"). The Senior Notes due 2023 bear interest at 3.75%, payable semi-annually on April 15 and October 15, beginning October 15, 2013, and are due on April 15, 2023, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $2.1 million, which yielded a 3.849% interest rate per annum upon issuance. For the year ended December 31, 2013, the Company amortized approximately $0.1 million of the discount which is included in interest expense on the Company’s Consolidated Statement of Operations. The following table reconciles the balance of the Senior Notes due 2023 on the Company’s Consolidated Balance Sheets as of December 31, 2013.  
(Dollars in thousands)
December 31, 2013

Senior Notes due 2023 face value
$
250,000

Unaccreted discount
(1,923
)
Senior Notes due 2023 carrying amount
$
248,077


Mortgage Notes Payable
In June 2013, the Company prepaid in full a secured loan from Teachers Insurance and Annuity Association of America bearing an interest rate of 7.25% at an amount equal to $94.3 million, consisting of outstanding principal of $77.0 million, accrued interest as of the redemption date of $0.5 million and a prepayment penalty of approximately $16.8 million. The unamortized deferred financing costs on this loan of $0.5 million were written off upon repayment. The Company recognized a loss on early extinguishment of debt of approximately $17.4 million related to this prepayment.

The following table reconciles the Company’s aggregate mortgage notes principal balance with the Company’s Consolidated Balance Sheets as of December 31, 2013 and 2012. For the years ended December 31, 2013, 2012 and 2011, the Company amortized approximately $0.4 million, $0.3 million and $0.7 million, respectively, of the net discount on the mortgage notes payable which is included in interest expense on the Company’s Consolidated Statement of Operations.
 
December 31,
(Dollars in thousands)
2013

 
2012

Mortgage notes payable principal balance
$
166,684

 
$
225,242

Unaccreted discount, net of premium
(888
)
 
(2,755
)
Mortgage notes payable carrying amount
$
165,796

 
$
222,487


The following table details the Company’s mortgage notes payable, with related collateral.  
 
Original Balance

 
Effective
Interest
Rate
(21)

 
Maturity
Date
 
Collateral
(22)
 
Principal and Interest
Payments (20)

 
Investment in Collateral at December 31,

 
Balance at December 31,
(Dollars in millions)
 
 
 
 
 
2013

 
2013

 
2012

Life Insurance Co.
$
4.7

 
7.77
%
 
1/17
 
MOB
 
Monthly/20-yr amort.

 
$
11.9

 
$
1.2

 
$
1.6

Commercial Bank
1.8

 
5.55
%
 
10/30
 
OTH
 
Monthly/27-yr amort.

 
7.9

 
1.5

 
1.6

Life Insurance Co.
15.1

 
5.49
%
 
1/16
 
MOB
 
Monthly/10-yr amort.

 
34.4

 
12.3

 
12.7

Commercial Bank (1)
17.4

 
6.48
%
 
5/15
 
MOB
 
Monthly/10-yr amort.

 
20.0

 
14.7

 
14.6

Commercial Bank (2)
12.0

 
6.11
%
 
7/15
 
2 MOBs
 
Monthly/10-yr amort.

 
19.5

 
10.0

 
9.9

Commercial Bank (3)
15.2

 
7.65
%
 
7/20
 
MOB
 
(19
)
 
20.2

 
12.7

 
12.8

Life Insurance Co. (4)
1.5

 
6.81
%
 
7/16
 
MOB
 
Monthly/9-yr amort.

 
—

 
—

 
1.1

Commercial Bank (5)
12.9

 
6.43
%
 
2/21
 
MOB
 
Monthly/12-yr amort.

 
20.7

 
11.1

 
11.3

Investment Fund (6)
80.0

 
7.25
%
 
12/16
 
15 MOBs
 
Monthly/30-yr amort.

 
—

 
—

 
77.5

Life Insurance Co.
7.0

 
5.53
%
 
1/18
 
MOB
 
Monthly/15-yr amort.

 
14.7

 
2.5

 
3.0

Investment Co. (7)
15.9

 
6.55
%
 
4/13
 
MOB
 
Monthly/30-yr amort.

 
—

 
—

 
14.9

Investment Co.
4.6

 
5.25
%
 
9/15
 
MOB
 
Monthly/10-yr amort.

 
7.0

 
4.2

 
4.2

Life Insurance Co. (8)
13.9

 
4.70
%
 
1/16
 
MOB
 
Monthly/25-yr amort.

 
26.5

 
11.5

 
11.9

Life Insurance Co. (9)
21.5

 
4.70
%
 
8/15
 
MOB
 
Monthly/25-yr amort.

 
44.2

 
17.4

 
18.1

Insurance Co. (10)
7.3

 
5.10
%
 
12/18
 
MOB
 
Monthly/25-yr amort.

 
14.6

 
7.0

 
7.3

Commercial Bank (11)
8.1

 
4.54
%
 
8/16
 
MOB
 
Monthly/10-yr amort.

 
15.6

 
7.6

 
7.8

Life Insurance Co. (12) (13)
5.3

 
4.06
%
 
11/14
 
MOB
 
Monthly/25-yr amort.

 
11.7

 
4.3

 
4.5

Life Insurance Co. (14)
3.1

 
4.06
%
 
11/14
 
MOB
 
Monthly/25-yr amort.

 
6.2

 
2.5

 
2.6

Life Insurance Co. (15)
7.9

 
4.00
%
 
8/20
 
MOB
 
Monthly/15-yr amort.

 
20.7

 
4.6

 
5.1

Commercial Bank (16)
15.0

 
5.25
%
 
4/27
 
MOB
 
Monthly/20-yr amort

 
33.3

 
12.5

 
—

Commercial Bank (17)
18.3

 
5.00
%
 
12/16
 
MOB
 
Monthly/30-yr amort

 
33.0

 
17.0

 
—

Commercial Bank (18)
13.1

 
5.00
%
 
4/16
 
MOB
 
Monthly/25-yr amort

 
20.1

 
11.2

 
—

 
 
 
 
 
 
 
 
 
 
 
$
382.2

 
$
165.8

 
$
222.5

______ 
(1)
The unaccreted portion of a $2.7 million discount recorded on this note upon acquisition is included in the balance above.
(2)
The unaccreted portion of a $2.1 million discount recorded on this note upon acquisition is included in the balance above.
(3)
The unaccreted portion of a $2.4 million discount recorded on this note upon acquisition is included in the balance above.
(4)
The Company repaid this mortgage note payable upon the sale of the building in June 2013. See Note 4 for additional information.
(5)
The unaccreted portion of a $1.0 million discount recorded on this note upon acquisition is included in the balance above.
(6)
The Company prepaid this mortgage note payable in June 2013 resulting in a loss on extinguishment of debt of $17.4 million.
(7)
The Company repaid this mortgage note payable in February 2013.
(8)
The unamortized portion of a $0.3 million premium recorded on this note upon acquisition is included in the balance above.
(9)
The unamortized portion of a $0.4 million premium recorded on this note upon acquisition is included in the balance above.
(10)
The unamortized portion of the $0.6 million premium recorded on this note upon acquisition is included in the balance above.
(11)
The unamortized portion of the $0.5 million premium recorded on this note upon acquisition is included in the balance above.
(12)
Balance consists of two notes secured by the same building.
(13)
The unamortized portions of the $0.3 million premium recorded on these notes upon acquisition are included in the balance above.
(14)
The unamortized portion of the $0.2 million premium recorded on this note upon acquisition is included in the balance above.
(15)
The unamortized portion of the $0.3 million premium recorded on this note upon acquisition is included in the balance above.
(16)
The unamortized portion of the $0.7 million premium recorded on this note upon acquisition is included in the balance above.
(17)
The unamortized portion of the $0.5 million premium recorded on this note upon acquisition is included in the balance above.
(18)
The unamortized portion of the $0.2 million premium recorded on this note upon acquisition is included in the balance above.
(19)
Payable in monthly installments of interest only for 24 months and then installments of principal and interest based on an 11-year amortization with the final payment due at maturity.
(20)
Payable in monthly installments of principal and interest with the final payment due at maturity (unless otherwise noted).
(21)
The contractual interest rates for the twenty outstanding mortgage notes ranged from 5.0% to 7.6% as of December 31, 2013.
(22)
MOB-Medical office building; OTH-Other.
Other Long-Term Debt Information
Future maturities of the Company’s notes and bonds payable as of December 31, 2013 were as follows: 
(Dollars in thousands)
Principal
Maturities

 
Net Accretion/
Amortization (1)

 
Notes and Bonds Payable

 
%

2014
$
12,334

 
$
(1,031
)
 
$
11,303

 
0.8
%
2015
50,527

 
(858
)
 
49,669

 
3.7
%
2016
58,380

 
(714
)
 
57,666

 
4.3
%
2017
540,844

 
(721
)
 
540,123

 
40.1
%
2018
8,042

 
(751
)
 
7,291

 
0.5
%
2019 and thereafter
684,557

 
(2,150
)
 
682,407

 
50.6
%
 
$
1,354,684

 
$
(6,225
)
 
$
1,348,459

 
100.0
%
______ 
(1)
Includes discount accretion and premium amortization related to the Company’s Senior Notes due 2017, Senior Notes due 2021, Senior Notes due 2023, and fifteen mortgage notes payable.