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Notes and Bonds Payable
 12 Months Ended
Dec. 31, 2014
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)
2014

 
2013

 
 
Unsecured Credit Facility
$
85,000

 
$
238,000

4/17
 
LIBOR + 1.40%

 
At maturity
 
Quarterly
Unsecured Term Loan Facility
200,000

 
—

2/19
 
LIBOR + 1.45%

 
At maturity
 
Quarterly
Senior Notes due 2017, net of discount
299,308

 
299,008

1/17
 
6.500
%
 
At maturity
 
Semi-Annual
Senior Notes due 2021, net of discount
397,864

 
397,578

1/21
 
5.750
%
 
At maturity
 
Semi-Annual
Senior Notes due 2023, net of discount
248,253

 
248,077

4/23
 
3.750
%
 
At maturity
 
Semi-Annual
Mortgage notes payable, net of discounts and including premiums
173,267

 
165,796

5/15-5/40
 
     5.00%-7.63%

 
Monthly
 
Monthly
 
$
1,403,692

 
$
1,348,459

 
 
 
 
 
 
 

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, 2014, 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, 2014). 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, 2014). 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, 2014, the Company had $85.0 million outstanding under the Unsecured Credit Facility with a weighted average interest rate of approximately 1.6% and a remaining borrowing capacity of approximately $615.0 million.
Unsecured Term Loan Facility due 2019
In February 2014, the Company entered into a $200.0 million unsecured term loan facility ("Unsecured Term Loan due 2019") with a syndicate of nine lenders that matures on February 26, 2019. The Unsecured Term Loan due 2019 bears interest at a rate equal to (x) LIBOR plus (y) a margin ranging from 1.00% to 1.95% (1.45% as of December 31, 2014) based upon the Company's unsecured debt ratings. Payments under the Unsecured Term Loan due 2019 are interest only, with the full amount of the principal due at maturity. The Unsecured Term Loan due 2019 may be prepaid at any time, without penalty. The proceeds from the Unsecured Term Loan due 2019 were used by the Company to repay borrowings on its Unsecured Credit Facility. The Unsecured Term Loan due 2019 has various financial covenant provisions that are required to be met on a quarterly and annual basis that are equivalent to those of the Unsecured Credit Facility. As of December 31, 2014, the Company had $200.0 million outstanding under the Unsecured Term Loan due 2019 with a weighted average interest rate of approximately 1.6%.
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 each of the years ended December 31, 2014, 2013 and 2012, the Company amortized approximately $0.3 million 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, 2014 and 2013.  
 
December 31,
(Dollars in thousands)
2014

 
2013

Senior Notes due 2017 face value
$
300,000

 
$
300,000

Unaccreted discount
(692
)
 
(992
)
Senior Notes due 2017 carrying amount
$
299,308

 
$
299,008


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, 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 each of the years ended December 31, 2014, 2013 and 2012, the Company amortized approximately $0.3 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 2021 on the Company’s Consolidated Balance Sheets as of December 31, 2014 and 2013.  
 
December 31,
(Dollars in thousands)
2014

 
2013

Senior Notes due 2021 face value
$
400,000

 
$
400,000

Unaccreted discount
(2,136
)
 
(2,422
)
Senior Notes due 2021 carrying amount
$
397,864

 
$
397,578


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 years ended December 31, 2014 and 2013, the Company amortized approximately $0.2 million and $0.1 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 2023 on the Company’s Consolidated Balance Sheets as of December 31, 2014.  
 
December 31,
(Dollars in thousands)
2014

 
2013

Senior Notes due 2023 face value
$
250,000

 
$
250,000

Unaccreted discount
(1,747
)
 
(1,923
)
Senior Notes due 2023 carrying amount
$
248,253

 
$
248,077


Mortgage Notes Payable
The following table reconciles the Company’s aggregate mortgage notes principal balance with the Company’s Consolidated Balance Sheets as of December 31, 2014 and 2013. For the years ended December 31, 2014, 2013 and 2012, the Company amortized approximately $1.1 million, $1.2 million and $1.0 million of the discount and $1.0 million, $0.7 million, and $0.7 million of the premium, respectively, on the mortgage notes payable which is included in interest expense on the Company’s Consolidated Statement of Operations.
 
December 31,
(Dollars in thousands)
2014

 
2013

Mortgage notes payable principal balance
$
172,530

 
$
166,684

Unamortized premium
3,205

 
2,708

Unaccreted discount
(2,468
)
 
(3,596
)
Mortgage notes payable carrying amount
$
173,267

 
$
165,796


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)
 
 
 
 
 
2014

 
2014

 
2013

Life Insurance Co.
$
4.7

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

 
$
12.1

 
$
0.9

 
$
1.2

Commercial Bank
1.8

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

 
7.9

 
1.5

 
1.5

Life Insurance Co.
15.1

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

 
36.1

 
11.9

 
12.3

Commercial Bank (1)
17.4

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

 
20.2

 
14.8

 
14.7

Commercial Bank (2)
12.0

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

 
19.4

 
10.1

 
10.0

Commercial Bank (3)
15.2

 
7.65
%
 
7/20
 
MOB
 
(19
)
 
20.2

 
12.7

 
12.7

Commercial Bank (4)
12.9

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

 
20.7

 
11.0

 
11.1

Life Insurance Co.
7.0

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

 
14.9

 
1.9

 
2.5

Investment Co.
4.6

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

 
6.5

 
4.1

 
4.2

Life Insurance Co. (5)
13.9

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

 
26.7

 
11.0

 
11.5

Life Insurance Co. (6)
21.5

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

 
41.5

 
16.6

 
17.4

Insurance Co. (7)
7.3

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

 
13.7

 
6.8

 
7.0

Commercial Bank (8)
8.1

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

 
15.7

 
7.5

 
7.6

Life Insurance Co. (9)
5.3

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

 
—

 
—

 
4.3

Life Insurance Co. (10)
3.1

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

 
—

 
—

 
2.5

Life Insurance Co. (11)
7.9

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

 
20.7

 
4.0

 
4.6

Commercial Bank (12)
15.0

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

 
33.4

 
11.9

 
12.5

Commercial Bank (13)
18.3

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

 
33.6

 
16.5

 
17.0

Commercial Bank (14)
13.1

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

 
20.1

 
10.7

 
11.2

Life Insurance Co. (15)
7.3

 
4.86
%
 
8/20
 
MOB
 
Monthly/27-yr amort

 
17.8

 
7.1

 
—

Municipal Government (16) (17)
11.9

 
4.79
%
 
(18)
 
MOB
 
Semi-Annual (18)

 
20.9

 
12.3

 
—

 
 
 
 
 
 
 
 
 
 
 
$
402.1

 
$
173.3

 
$
165.8

______ 
(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 unaccreted portion of a $1.0 million discount recorded on this note upon acquisition is included in the balance above.
(5)
The unamortized portion of a $0.3 million premium recorded on this note upon acquisition is included in the balance above.
(6)
The unamortized portion of a $0.4 million premium recorded on this note upon acquisition is included in the balance above.
(7)
The unamortized portion of the $0.6 million premium recorded on this note upon acquisition is included in the balance above.
(8)
The unamortized portion of the $0.5 million premium recorded on this note upon acquisition is included in the balance above.
(9)
Balance consists of two notes secured by the same building. The company repaid these notes in October 2014.
(10)
The company repaid this mortgage note in October 2014.
(11)
The unamortized portion of the $0.3 million premium recorded on this note upon acquisition is included in the balance above.
(12)
The unamortized portion of the $0.7 million premium recorded on this note upon acquisition is included in the balance above.
(13)
The unamortized portion of the $0.5 million premium recorded on this note upon acquisition is 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 $0.4 million premium recorded on this note upon acquisition is included in the balance above.
(16)
Balance consists of four notes secured by the same building.
(17)
The unamortized portion of the $1.0 million premium recorded on the four notes upon acquisition is included in the balance above.
(18)
These four mortgage notes payable are series municipal bonds that have maturity dates ranging from from May 2017 to May 2040. The note payable with the earliest maturity date will require principal and interest payments while the remaining notes payable will require interest only payments. One of the notes payable matures in May 2017 and the remaining three have future maturity dates but allow repayment in May 2020 without penalty. The Company intends on repaying all three notes payable at that time.
(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 22 outstanding mortgage notes ranged from 5.0% to 7.6% as of December 31, 2014.
(22)
MOB-Medical office building; OTH-Other.

Subsequent Mortgage Note Payable Repayment
In February 2015, the Company repaid in full a secured loan from Wells Fargo Commercial Mortgage bearing an interest rate of 5.45% consisting of outstanding principal of $15.0 million and accrued interest as of the redemption date of $0.1 million.
Other Long-Term Debt Information
Future maturities of the Company’s notes and bonds payable as of December 31, 2014 were as follows: 
(Dollars in thousands)
Principal
Maturities

 
Net Accretion/
Amortization (1)

 
Notes and Bonds Payable

 
%

2015
$
50,826

 
$
(624
)
 
$
50,202

 
3.6
%
2016
58,698

 
(473
)
 
58,225

 
4.1
%
2017
388,181

 
(473
)
 
387,708

 
27.6
%
2018
8,420

 
(496
)
 
7,924

 
0.6
%
2019
202,633

 
(636
)
 
201,997

 
14.4
%
2020 and thereafter
698,772

 
(1,136
)
 
697,636

 
49.7
%
 
$
1,407,530

 
$
(3,838
)
 
$
1,403,692

 
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 17 mortgage notes payable.