BORROWINGS

The weighted average interest rate at December 31, 2013 for the $3.5 billion of debt outstanding was 3.9%, compared to the weighted average interest rate of 3.8% on $1.7 billion of debt outstanding at December 31, 2012. We utilize both conventional and tax exempt debt to help finance our activities. Borrowings are made through individual property mortgages as well as Company-wide secured and unsecured credit facilities. We utilize fixed rate borrowings, interest rate swaps and interest rate caps to manage our current and future interest rate risk. More details on our borrowings can be found in the schedules presented later in this section.

We maintain a total of $679.5 million of secured credit facilities with Prudential Mortgage Capital, credit enhanced by Fannie Mae, or Fannie Mae Facilities. The Fannie Mae Facilities provide for both fixed and variable rate borrowings and have Fannie Mae rate tranches with maturities from 2014 through 2018. The interest rate on the majority of the variable portion renews every 90 days and is based on the FNMA discount mortgage backed security rate on the date of renewal, which, for the Company, has historically approximated three-month LIBOR less an average of 0.17% over the life of the Fannie Mae Facilities, plus a fee of 0.49% to 0.67%. Borrowings under the Fannie Mae Facilities totaled $453.5 million at December 31, 2013, consisting of $50.0 million under a fixed portion at a rate of 4.7%, and the remaining $403.5 million under the variable rate portion of the facility at an average rate of 0.8%. The available borrowing capacity at December 31, 2013, was $453.5 million. Commitment fees related to our unused Fannie Mae Facilities totaled $548,000 for the year ended December 31, 2013. The Company has 4 interest rate swap agreements, totaling a notional amount of $125 million designed to fix the interest rate on a portion of the variable rate borrowings outstanding under the Fannie Mae Facilities at approximately 4.6%. The interest rate swaps have maturities between 2014 and 2015. The swaps are highly effective and are designed as cash flow hedges. The Company has also entered into 22 interest rate caps totaling a notional amount of $273 million which are designed to cap a portion of the Fannie Mae Facilities. These interest rate caps have maturities between 2014 and 2018 and eleven are set at 6.0%, nine set at 4.5%, and two set at 5.0%. The Fannie Mae Facilities are subject to certain borrowing base calculations that can effectively reduce the amount that may be borrowed.

The Company has a $200.0 million credit facility with Freddie MAC, or the Freddie Mac Facility. At December 31, 2013, the Company had $198.2 million borrowed against the Freddie Mac Facility at an interest rate of 0.7%. Commitment fees related to the Freddie Mac Facility totaled $3,000 for the year ended December 31, 2013. The Company has 7 interest rate swap agreements, totaling a notional amount of $94.0 million designed to fix the interest rate on a portion of the variable rate borrowings outstanding under the Freddie Mac Facility at approximately 4.6%. The interest rate swaps expire in 2014. The Company has also entered into one interest rate cap totaling a notional amount of $15.0 million which is designated against the Freddie Mac Facility. This interest rate cap has a 2014 maturity and is set at 5.0%.

The Company also maintains a $500.0 million unsecured credit facility with fourteen banks led by Key Bank National Association (Key Bank). The Key Bank Credit Line bears an interest rate of LIBOR plus a spread of 0.90% to 1.70% based on a investment grade pricing grid. This credit line expires in August 2017 with two six month extension options. At December 31, 2013, the Company had $496.3 million available to be borrowed under the Key Bank Line agreement with zero borrowings under this facility. Approximately $3.7 million of the facility is used to support letters of credit. Commitment fees related to this facility totaled $887,000 for the year ended December 31, 2013.

Each of the Company’s credit facilities is subject to various covenants and conditions on usage. If the Company were to fail to satisfy a condition to borrowing, the available credit under one or more of the facilities could not be drawn, which could adversely affect the Company’s liquidity. Moreover, if the Company were to fail to make a payment or violate a covenant under a credit facility, after applicable cure periods, one or more of its lenders could declare a default, accelerate the due date for repayment of all amounts outstanding and/or foreclose on properties securing such facilities. Any such event could have a material adverse effect on the Company. The Company believes it was in compliance with these covenants and conditions on usage at December 31, 2013.

At December 31, 2013, the Company had $1.1 billion of fixed rate conventional property mortgages with an average interest rate of 4.0% and an average maturity in 2019 and a total of $27.3 million variable rate mortgages with an embedded cap rate of 7.0% at an average interest rate of 3.3% with a maturity in 2015.

At December 31, 2013, the Company had $96.0 million (after considering the impact of interest rate swap and cap agreements in effect) of conventional, secured variable rate debt outstanding at an average interest rate of 0.7%, $225.3 million of capped conventional, secured variable rate debt at an average interest rate of 1.1%, and $88.8 million of capped tax-free variable rate debt at an average rate of 0.9%. The interest rate on all other secured debt, totaling $1.4 billion, was hedged or fixed at an average interest rate of 4.3%. Additionally, the Company had $1.7 billion of senior unsecured notes and term loans fixed at an average interest rate of 4.3% and a $500.0 million variable rate credit facility with an average interest rate of 1.10% with zero borrowings at December 31, 2013.

On October 16, 2013, MAALP issued $350 million in aggregate principal amount of notes, maturing on October 15, 2023 with an interest rate of 4.3% per annum (the "2023 Notes"). The purchase price paid by the initial purchasers was 99.047% of the principal amount. The 2023 Notes are general unsecured senior obligations of MAALP and rank equally in right of payment with all other senior unsecured indebtedness of MAALP. Interest on the 2023 Notes is payable on April 15 and October 15 of each year, beginning on April 15, 2014. The net proceeds from the offering after deducting the original issue discount of approximately $3.3 million and underwriting commissions and expenses of approximately $2.3 million was approximately $344.4 million. The 2023 Notes have been reflected net of discount in the consolidated balance sheet. The Company entered into three forward swaps totaling $150 million, which resulted in a total effective interest rate of 4.15%.

On December 13, 2013, MAALP completed a series of exchange offers (the “Exchange Offers”) pursuant to which it exchanged $154,235,000 aggregate principal amount of 6.25% Senior Notes due 2014, $169,161,000 aggregate principal amount of 5.50% Senior Notes due 2015 and $68,130,000 aggregate principal amount of 6.05% Senior Notes due 2016 (collectively, the “Existing Notes”) issued by Colonial Realty Limited Partnership, a Delaware limited partnership and wholly owned subsidiary of MAALP, for $154,235,000 aggregate principal amount of MAALP’s new 6.25% Senior Notes due 2014 (the “2014 Notes”), $169,112,000 aggregate principal amount of MAALP’s new 5.50% Senior Notes due 2015 (the “2015 Notes”) and $68,130,000 aggregate principal amount of MAALP’s new 6.05% Senior Notes due 2016 (the “2016 Notes” and together with the 2014 Notes and the 2015 Notes, the “Exchange Notes”), plus approximately $975,000 in cash.

The Exchange Notes are senior unsecured obligations of MAALP and will rank equally in right of payment with all of MAALP’s other existing and future senior unsecured indebtedness. Interest on the 2014 Notes will accrue from, and including, December 15, 2013 and be payable on June 15, 2014, which will also be the maturity date for the 2014 Notes. Interest on the 2015 Notes will accrue from, and including, October 1, 2013 and be payable semiannually on April 1 and October 1 of each year, beginning on April 1, 2014. Interest on the 2016 Notes will accrue from, and including, September 1, 2013 and be payable semiannually on March 1 and September 1 of each year, beginning on March 1, 2014. In certain circumstances described below MAALP may be required to pay additional interest on the Exchange Notes.

The Indenture under which the 2023 notes were issued and the Indentures contain certain covenants that, among other things, limit the ability of MAALP and its subsidiaries to incur secured and unsecured indebtedness if not in pro forma compliance with the following negative covenants: (1) total leverage not to exceed 60% of adjusted total assets, (2) secured leverage not to exceed 40% of adjusted total assets and (3) a fixed charge coverage ratio of at least 1.50 to 1. In addition, MAALP is required to maintain at all times unencumbered consolidated total assets of not less than 150% of the aggregate principal amount of its outstanding unsecured debt. At December 31, 2013, MAALP was in compliance with each of these financial covenants.

All of the Existing Notes tendered into the Exchange Offers were cancelled in connection with the settlement of the Exchange Offers. In connection with the issuance and sale of the Exchange Notes, MAALP also entered into three separate registration rights agreements, each dated as of December 13, 2013, and each with J.P. Morgan Securities LLC, the dealer manager in the Exchange Offers (the “Registration Rights Agreements”). Under the Registration Rights Agreements, MAALP agreed to use commercially reasonable efforts to complete exchange offers registered under the Securities Act pursuant to which MAALP will offer to issue new exchange notes containing terms substantially similar in all material respects to the Exchange Notes (except that the exchange notes will not contain terms with respect to transfer restrictions or any increase in annual interest rate) in exchange for the Exchange Notes. MAALP also agreed, if it determines that a registered exchange offer is not available or specified other circumstances occur, to use commercially reasonable efforts to file and have become effective a shelf registration statement relating to resales of the Exchange Notes. MAALP will be obligated to pay additional interest of up to 0.50% per annum on the Exchange Notes if it does not complete the exchange offers within 270 days after the issue date of the Exchange Notes and in other specified circumstances.

The following table summarizes the Company’s indebtedness at December 31, 2013, (dollars in thousands):



	Borrowed Balance		Effective Rate		Contract Maturity
Fixed Rate Secured Debt
Individual property mortgages	$	1,111,812	4.0	%	4/1/2013
Fannie Mae conventional credit facilities	50,000		4.7	%	3/31/2017
Credit facility balances managed with interest rate swaps
LIBOR-based interest rate swaps	219,000		5.3	%	8/31/2014
Total fixed rate secured debt	1,380,812		4.2	%	6/13/2018

Variable Rate Secured Debt (1)
Fannie Mae conventional credit facilities	189,721		0.8	%	12/2/2016
Fannie Mae tax-free credit facilities	88,812		0.9	%	7/23/2031
Freddie Mac credit facilities	104,248		0.7	%	7/1/2014
Freddie Mac mortgages	27,342		3.3	%	10/31/2015
Total variable rate secured debt	410,123		1.0	%	5/27/2019

Total Secured Debt	$	1,790,935	3.5	%	9/1/2018

Unsecured Debt
Term loan fixed with swaps	550,000		3.1	%	11/10/2017
Fixed rate bonds	1,131,783		5.0	%	9/22/2019
Total Unsecured Debt	$	1,681,783	4.3	%	2/12/2019

Total Outstanding Debt	$	3,472,718	3.9	%	4/28/2018

(1) Includes capped balances

The following table summarizes interest rate ranges and maturity of the Company’s indebtedness at December 31, 2013 and the balance of the Company’s indebtedness at December 31, 2012 (dollars in millions):



	At December 31, 2013
	Actual Interest Rates	Current Average Interest Rate	Maturity	Balance		Balance at December 31, 2012
Fixed Rate:
Taxable Secured	1.77 - 6.21%	4.07%	2014-2035	$	1,161.8	$	422.4
Unsecured	3.15 - 6.25%	5.02%	2017-2024	1,131.8		310.0
Interest rate swaps	2.63 - 6.63%	4.76%	2014-2018	769.0		559.0
				$	3,062.6	$	1,291.4
Variable Rate: (1)
Taxable	0.66 - 0.91%	0.72%	2014-2033	122.7		70.9
Interest rate caps	0.73 - 1.02%	0.80%	2014-2033	287.4		288.5
Unsecured	0.00%	—%	2015	—		23.0
				$	410.1	$	382.4
				$	3,472.7	$	1,673.8

(1)

Amounts are adjusted to reflect interest rate swap and cap agreements in effect at December 31, 2013, and 2012, respectively, which results in the Company paying fixed interest payments over the terms of the interest rate swaps and on changes in interest rates above the strike rate of the cap. Rates and maturities for capped balances are for the underlying debt, unless the strike rate has been reached.

The following table includes scheduled principal repayments on the borrowings at December 31, 2013, as well as the amortization of the fair market value of debt assumed (dollars in thousands):



Year	Amortization		Maturities		Total
2014	$	26,642	$	430,640	$	457,282
2015	8,361		388,693		397,054
2016	9,043		164,300		173,343
2017	10,014		469,306		479,320
2018	11,382		379,247		390,629
Thereafter	71,711		1,503,379		1,575,090
	$	137,153	$	3,335,565	$	3,472,718