Notes Payable and Unsecured Line of Credit

The Parent Company does not hold any indebtedness, but guarantees all of the unsecured debt and 8.2% of the secured debt of the Operating Partnership.

Notes Payable

Notes payable consist of mortgage loans secured by properties and unsecured public debt. Mortgage loans may be prepaid, but could be subject to yield maintenance premiums. Mortgage loans are generally due in monthly installments of principal and interest or interest only, and mature over various terms through 2022, whereas, interest on unsecured public debt is payable semi-annually and the debt matures over various terms through 2021. Fixed interest rates on mortgage loans range from 5.22% to 8.40% with a weighted average rate of 6.55%. Fixed interest rates on unsecured public debt range from 4.80% to 7.95% with a weighted average rate of 5.61%. As of June 30, 2011, the Company had two variable rate mortgage loans, one in the amount of $3.9 million with a variable interest rate equal to LIBOR plus 380 basis points maturing on October 1, 2014 and one construction loan with a current balance of $8.9 million with a variable interest rate of LIBOR plus 300 basis points maturing on September 2, 2011. On January 18, 2011, the Company paid the maturing balance of $161.7 million of 7.95% ten-year senior unsecured notes from proceeds from the unsecured line of credit.

The Company is required to comply with certain financial covenants for its unsecured public debt as defined in the indenture agreements such as Consolidated Debt to Consolidated Assets, Consolidated Secured Debt to Consolidated Assets, Consolidated Income for Debt Service to Consolidated Debt Service, and Unencumbered Consolidated Assets to Unsecured Consolidated Debt. As of June 30, 2011, management of the Company believes it is in compliance with all financial covenants for its unsecured public debt.

Unsecured Line of Credit

The Company has a $600.0 million unsecured line of credit (the “Line”) commitment under an agreement with Wells Fargo Bank and a syndicate of other banks that matures in February 2012. The Line has a variable interest rate of LIBOR plus 55 basis points and an annual facility fee of 15 basis points subject to Regency maintaining its corporate credit and senior unsecured ratings at BBB. The balance on the Line was $30.0 million and $10.0 million at June 30, 2011 and December 31, 2010, respectively. The Company has initiated discussions with its lender to enter into a new Line commitment and term, and expects to close on a new commitment prior to February 2012.

The Company is required to comply with certain financial covenants as defined in the Credit Agreement such as Minimum Net Worth, Ratio of Total Liabilities to Gross Asset Value (“GAV”) and Ratio of Recourse Secured Indebtedness to GAV, Ratio of Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) to Fixed Charges, and other covenants customary with this type of unsecured financing. As of June 30, 2011, management of the Company believes it is in compliance with all financial covenants for the Line. The proceeds from the Line are used to finance the acquisition and development of real estate and for general working-capital purposes.

The Company previously had a $113.8 million revolving credit facility under an agreement with Wells Fargo Bank and a syndicate of other banks that matured in February 2011. There was no balance outstanding at December 31, 2010 and the Company did not renew this facility when it matured in February 2011.

The Company’s outstanding debt at June 30, 2011 and December 31, 2010 consists of the following (in thousands):



		2011	2010
Notes payable:
Fixed rate mortgage loans	$	417,712	402,151
Variable rate mortgage loans		12,767	11,189
Fixed rate unsecured loans		1,509,666	1,671,129
Total notes payable		1,940,145	2,084,469
Unsecured line of credit		30,000	10,000
Total	$	1,970,145	2,094,469

As of June 30, 2011, scheduled principal payments and maturities on notes payable were as follows (in thousands):



Scheduled Principal Payments and Maturities by Year:		Scheduled Principal Payments	Mortgage Loan Maturities	Unsecured Maturities ⁽¹⁾		Total
2011	$	2,825	8,850	20,000		31,675
2012		5,836	—	222,377		228,213
2013		5,763	16,342	—		22,105
2014		5,174	20,928	150,000		176,102
2015		3,783	46,313	350,000		400,096
Beyond 5 Years		11,398	302,238	800,000		1,113,636
Unamortized debt (discounts)/premiums, net		—	1,029	(2,711	)	(1,682	)
Total	$	34,779	395,700	1,539,666		1,970,145

⁽¹⁾ Includes unsecured public debt and the Line. The Line is included in 2012 maturities and matures in February 2012.