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Notes and Bonds Payable
 12 Months Ended
Dec. 31, 2015
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)
2015

 
2014

 
 
Unsecured Credit Facility
$
206,000

 
$
85,000

4/17
 
LIBOR + 1.15%

 
At maturity
 
Quarterly
Unsecured Term Loan Facility
200,000

 
200,000

2/19
 
LIBOR + 1.20%

 
At maturity
 
Quarterly
Senior Notes due 2017, net of discount
—

 
299,308

—
 
6.50
%
 
At maturity
 
Semi-Annual
Senior Notes due 2021, net of discount
398,168

 
397,864

1/21
 
5.75
%
 
At maturity
 
Semi-Annual
Senior Notes due 2023, net of discount
248,435

 
248,253

4/23
 
3.75
%
 
At maturity
 
Semi-Annual
Senior Notes due 2025, net of discount
249,804

 
—

5/25
 
3.88
%
 
At maturity
 
Semi-Annual
Mortgage notes payable, net of discounts and including premiums
129,087

 
173,267

4/16-5/40
 
     4.15%-7.63%

 
Monthly
 
Monthly

$
1,431,494

 
$
1,403,692

 
 
 
 
 
 
 

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, 2015, 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% (1.15% as of December 31, 2015). In addition, the Company pays a facility fee per annum on the aggregate amount of commitments ranging from 0.15% to 0.35% (0.20% as of December 31, 2015). 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. In September 2015, the Company received a credit rating upgrade. This upgrade, coupled with another upgrade that the Company received earlier in the year, resulted in a decrease in the spread over LIBOR on outstanding borrowings on the Unsecured Credit Facility (decreasing from 1.45% to 1.20%). As of December 31, 2015, the Company had $206.0 million outstanding under the Unsecured Credit Facility with a weighted average interest rate of approximately 1.6% and a remaining borrowing capacity of approximately $494.0 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% (1.20% as of December 31, 2015) 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. In September 2015, the Company received a credit rating upgrade. This upgrade, coupled with another upgrade that the Company received earlier in the year, resulted in a decrease in the spread over LIBOR on outstanding borrowings on the Unsecured Credit Facility (decreasing from 1.40% to 1.15%). As of December 31, 2015, 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 Redemption
On May 15, 2015, the Company redeemed its unsecured senior notes due 2017 (the "Senior Notes due 2017") at a redemption price equal to an aggregate of $333.2 million, consisting of outstanding principal of $300.0 million, accrued interest of $6.4 million, and a "make-whole" amount of approximately $26.8 million for the early extinguishment of debt. The unaccreted discount and unamortized costs on these notes of $1.2 million was written off upon redemption. The Company recognized a loss on early extinguishment of debt of approximately $28.0 million related to this redemption.
The following table reconciles the balance of the Senior Notes due 2017 on the Company’s Consolidated Balance Sheets as of December 31, 2015 and 2014:  
 
December 31,
(Dollars in thousands)
2015

 
2014

Senior Notes due 2017 face value
$
—

 
$
300,000

Unaccreted discount
—

 
(692
)
Senior Notes due 2017 carrying amount
$
—

 
$
299,308


Senior Notes due 2021
On December 13, 2010, the Company issued $400.0 million of unsecured senior notes due 2021 (the "Senior Notes due 2021") in a registered public offering. 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, 2015, 2014 and 2013, the Company amortized approximately $0.3 million of the discount which is included in interest expense on the Company’s Consolidated Statement of Income. The following table reconciles the balance of the Senior Notes due 2021 on the Company’s Consolidated Balance Sheets as of December 31, 2015 and 2014:  
 
December 31,
(Dollars in thousands)
2015

 
2014

Senior Notes due 2021 face value
$
400,000

 
$
400,000

Unaccreted discount
(1,832
)
 
(2,136
)
Senior Notes due 2021 carrying amount
$
398,168

 
$
397,864


Senior Notes due 2023
On March 26, 2013, the Company issued $250.0 million of unsecured senior notes due 2023 (the "Senior Notes due 2023") in a registered public offering. 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, 2015, 2014 and 2013, the Company amortized approximately $0.2 million, $0.2 million and $0.1 million, respectively, of the discount which is included in interest expense on the Company’s Consolidated Statement of Income. The following table reconciles the balance of the Senior Notes due 2023 on the Company’s Consolidated Balance Sheets as of December 31, 2015 and 2014:  
 
December 31,
(Dollars in thousands)
2015

 
2014

Senior Notes due 2023 face value
$
250,000

 
$
250,000

Unaccreted discount
(1,565
)
 
(1,747
)
Senior Notes due 2023 carrying amount
$
248,435

 
$
248,253


Senior Notes due 2025
On April 24, 2015, the Company issued $250.0 million of unsecured senior notes due 2025 (the "Senior Notes due 2025") in a registered public offering. The Senior Notes due 2025 bear interest at 3.875%, payable semi-annually on May 1 and November 1, beginning November 1, 2015, and are due on May 1, 2025, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $0.2 million, which yielded a 3.885% interest rate per annum upon issuance. The Company incurred approximately $2.3 million in debt issuance costs that are included in Other assets, which will be amortized to maturity. Concurrent with this transaction, the Company settled four forward starting swap agreements for $1.7 million. The Senior Notes due 2025 have various financial covenants that are required to be met on a quarterly and annual basis. The following table reconciles the balance of the Senior Notes due 2023 on the Company’s Consolidated Balance Sheets as of December 31, 2015 and 2014:
 
 
December 31,
(Dollars in thousands)
2015

 
2014

Senior Notes due 2025 face value
$
250,000

 
$
—

Unaccreted discount
(196
)
 
—

Senior Notes due 2025 carrying amount
$
249,804

 
$
—


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, 2015 and 2014. For the years ended December 31, 2015, 2014 and 2013, the Company amortized approximately $0.8 million, $1.1 million and $1.2 million of the discount and $1.0 million, $1.0 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 Statements of Income.
 
December 31,
(Dollars in thousands)
2015

 
2014

Mortgage notes payable principal balance
$
128,161

 
$
172,530

Unamortized premium
2,705

 
3,205

Unaccreted discount
(1,779
)
 
(2,468
)
Mortgage notes payable carrying amount
$
129,087

 
$
173,267


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

 
Effective
Interest
Rate
(24)

 
Maturity
Date
 
Collateral
(25)
 
Principal and Interest
Payments (23)

 
Investment in Collateral at December 31,

 
Balance at December 31,
(Dollars in millions)
 
 
 
 
 
2015

 
2015

 
2014

Commercial Bank (1)
$
17.4

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

 
$
—

 
$
—

 
$
14.8

Commercial Bank (2)
12.0

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

 
—

 
—

 
10.1

Life Insurance Co. (3)
21.5

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

 
—

 
—

 
16.6

Investment Co. (4)
4.6

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

 
—

 
—

 
4.1

Life Insurance Co. (5)
15.1

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

 
—

 
—

 
11.9

Life Insurance Co. (6)
13.9

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

 
—

 
—

 
11.0

Commercial Bank (7)
13.1

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

 
20.1

 
10.3

 
10.7

Commercial Bank (8)
8.1

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

 
15.7

 
7.4

 
7.5

Commercial Bank (9)
18.3

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

 
34.5

 
16.0

 
16.5

Life Insurance Co.
4.7

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

 
12.4

 
0.4

 
0.9

Life Insurance Co.
7.0

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

 
13.7

 
1.4

 
1.9

Insurance Co. (10)
7.3

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

 
14.1

 
6.5

 
6.8

Commercial Bank (11)
9.5

 
5.07
%
 
3/19
 
MOB
 
Monthly/5-yr amort.

 
13.8

 
9.7

 
—

Commercial Bank (12)
9.4

 
4.17
%
 
7/19
 
MOB
 
Monthly/8-yr amort

 
27.8

 
9.6

 
—

Commercial Bank (13)
15.2

 
7.65
%
 
7/20
 
MOB
 
(22
)
 
20.1

 
12.7

 
12.7

Life Insurance Co. (14)
7.9

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

 
20.7

 
3.3

 
4.0

Life Insurance Co. (15)
7.3

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

 
17.9

 
6.9

 
7.1

Commercial Bank (16)
12.9

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

 
20.8

 
10.9

 
11.0

Financial Services (17)
9.7

 
4.32
%
 
9/24
 
MOB
 
Monthly/10-yr amort

 
16.1

 
9.4

 
—

Commercial Bank (18)
15.0

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

 
33.4

 
11.2

 
11.9

Commercial Bank
1.8

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

 
7.9

 
1.4

 
1.5

Municipal Government (19) (20)
11.9

 
4.79
%
 
(21) 
 
MOB
 
Semi-Annual (21)

 
20.9

 
12.0

 
12.3

 
 
 
 
 
 
 
 
 
 
 
$
309.9

 
$
129.1

 
$
173.3

______ 
(1)
The Company repaid this mortgage note in January 2015.
(2)
The Company repaid this mortgage note in April 2015.
(3)
The Company repaid this mortgage note in May 2015.
(4)
The Company repaid this mortgage note in June 2015.
(5)
The Company repaid this mortgage note in December 2015.
(6)
The Company repaid this mortgage note in October 2015.
(7)
The unamortized portion of the $0.2 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)
The unamortized portion of the $0.5 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 $0.2 million premium recorded on this note upon acquisition is included in the balance above.
(12)
The unamortized portion of the $0.3 million premium recorded on this note upon acquisition is included in the balance above.
(13)
The unaccreted portion of a $2.4 million discount recorded on this note upon acquisition is included in the balance above.
(14)
The unamortized portion of the $0.3 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)
The unaccreted portion of a $1.0 million discount recorded on this note upon acquisition is included in the balance above.
(17)
The unaccreted portion of the $0.1 million discount recorded on the note upon acquisition is included in the balance above.
(18)
The unamortized portion of the $0.7 million premium recorded on this note upon acquisition is included in the balance above.
(19)
Balance consists of four notes secured by the same building.
(20)
The unamortized portion of the $1.0 million premium recorded on the four notes upon acquisition is included in the balance above.
(21)
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.
(22)
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.
(23)
Payable in monthly installments of principal and interest with the final payment due at maturity (unless otherwise noted).
(24)
The contractual interest rates for the 19 outstanding mortgage notes ranged from 4.2% to 7.6% as of December 31, 2015.
(25)
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, 2015 were as follows: 
(Dollars in thousands)
Principal
Maturities

 
Net Accretion/
Amortization (1)

 
Notes and Bonds Payable

 
%

2016
$
37,369

 
$
(24
)
 
$
37,345

 
2.6
%
2017
209,701

 
(338
)
 
209,363

 
14.6
%
2018
8,966

 
(399
)
 
8,567

 
0.6
%
2019
220,950

 
(616
)
 
220,334

 
15.4
%
2020
20,987

 
(783
)
 
20,204

 
1.4
%
2021 and thereafter
936,188

 
(507
)
 
935,681

 
65.4
%
 
$
1,434,161

 
$
(2,667
)
 
$
1,431,494

 
100.0
%
______ 
(1)
Includes discount accretion and premium amortization related to the Company’s Senior Notes due 2021, Senior Notes due 2023, Senior Notes due 2025, and 16 mortgage notes payable.