Notes Payable

On September 30, 2013 and December 31, 2012, we had total indebtedness of approximately $1.86 billion and $1.67 billion, respectively. Our indebtedness as of September 30, 2013 consisted of both conventional and tax exempt debt. Borrowings were made through individual property mortgages as well as company-wide credit facilities. We utilize both secured and unsecured debt.

On March 1, 2012, our Operating Partnership entered into a $150 million unsecured term loan agreement with a syndicate of banks led by KeyBank and J.P. Morgan with a variable rate resetting monthly at LIBOR plus a spread of 1.40% to 2.15% based on a leveraged-based pricing grid and a maturity date of March 1, 2017. In July 2012, we received an investment grade rating (Baa2) from Moody's rating service, which caused the variable rate to reset monthly at LIBOR plus a spread of 1.10% to 2.05% based on an investment grade ratings grid. As of September 30, 2013, the full amount was outstanding under this agreement.

On August 31, 2012, our Operating Partnership issued $175 million of Senior Unsecured Notes to be funded at three separate times. The notes were offered in a private placement with four tranches: $18 million at 3.15% maturing on November 30, 2017; $20 million at 3.61% maturing on November 30, 2019; $117 million at 4.17% maturing on November 30, 2022; and $20 million at 4.33% maturing on November 30, 2024. As of September 30, 2013, the full amount of the notes has been funded and is included in our balance sheet.

On June 14, 2013, our Operating Partnership entered into a $250 million term loan agreement with JPMorgan at a rate of LIBOR plus a spread of 1.30% on any outstanding borrowings. This agreement matures on June 14, 2014, although borrowings are only allowed to be drawn upon up until 60 days subsequent to the closing of the Merger. We had no borrowings under this agreement at September 30, 2013.

On August 7, 2013, our Operating Partnership entered into a $500 million unsecured revolving credit facility agreement with KeyBank National Association and thirteen other banks. This agreement amends our Operating Partnership's previous unsecured credit facility with KeyBank. Interest is paid using an investment grade pricing grid using LIBOR plus a spread of 0.90% to 1.70%. As of September 30, 2013, we had $350 million borrowed under this facility.

As of September 30, 2013, approximately 35% of our outstanding debt was borrowed through secured credit facility relationships with Prudential Mortgage Capital, which are credit enhanced by the Federal National Mortgage Association, or FNMA, and Financial Federal, which are credit enhanced by Federal Home Loan Mortgage Corporation, or Freddie Mac.

We utilize interest rate swaps and interest rate caps to help manage our current and future interest rate risk and entered into 18 interest rate swaps and 12 interest rate caps as of September 30, 2013, representing notional amounts totaling $559.0 million and $224.6 million, respectively. We also held 11 non-designated interest rate caps with notional amounts totaling $63.8 million as of September 30, 2013.

The following table summarizes our outstanding debt structure as of September 30, 2013 (dollars in thousands):



	Borrowed Balance		Effective Rate		Contract Maturity
Fixed Rate Secured Debt
Individual property mortgages	$	382,817	4.7	%	3/29/2019
FNMA conventional credit facilities	50,000		4.7	%	3/31/2017
Credit facility balances with:
LIBOR-based interest rate swaps	259,000		5.3	%	7/20/2014
Total fixed rate secured debt	$	691,817	4.9	%	5/4/2017
Variable Rate Secured Debt ⁽¹⁾
FNMA conventional credit facilities	$	189,721	0.7	%	12/2/2016
FNMA tax-free credit facilities	89,217		0.9	%	7/23/2031
Freddie Mac credit facilities	64,247		0.7	%	7/1/2014
Freddie Mac mortgage	15,200		3.6	%	1/1/2016
Total variable rate secured debt	$	358,385	0.9	%	2/3/2020
Total Secured Debt	$	1,050,202	3.5	%	4/12/2018

Unsecured Debt
Variable rate credit facility	$	350,000	1.3	%	8/7/2017
Term loan fixed with swaps	150,000		2.4	%	3/1/2017
Fixed rate senior private placement bonds	310,000		4.5	%	7/27/2021
Total Unsecured Debt	$	810,000	2.7	%	1/14/2019

Total Outstanding Debt	$	1,860,202	3.2	%	8/11/2018

⁽¹⁾ Includes capped balances.