Borrowings

The weighted average interest rate at September 30, 2015 for the $3.43 billion of debt outstanding was 3.6%, compared to the weighted average interest rate of 3.7% on $3.52 billion of debt outstanding at December 31, 2014. Our debt consists of an unsecured credit facility, unsecured term loans, senior unsecured notes, a secured credit facility with Fannie Mae, and secured property mortgages. 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 Report.

At September 30, 2015, we had $145.8 million (after considering the impact of interest rate swap and cap agreements in effect) of secured variable rate debt outstanding at an average interest rate of 0.8% and $125.0 million of capped secured variable rate debt at an average interest rate of 0.8%. The interest rate on all other secured debt, totaling $1.1 billion, was hedged or fixed at an average interest rate of 4.0%. Additionally, we had $1.9 billion of senior unsecured notes and term loans fixed at an average interest rate of 4.0% and a $500 million variable rate credit facility with an average interest rate of 1.3% with $184.0 million borrowed at September 30, 2015.

Unsecured Credit Facility

We maintain a $500.0 million unsecured credit facility with fourteen banks led by KeyBank National Association (the KeyBank Facility). The KeyBank Facility includes an expansion option up to $800.0 million. The KeyBank Facility bears an interest rate of LIBOR plus a spread of 0.90% to 1.70% based on an investment grade pricing grid and is currently bearing interest at 1.29%. This credit line expires in August 2017 with two six-month extension options. At September 30, 2015, we had $496.7 million total capacity under the KeyBank Facility with $184.0 million borrowed. Approximately $3.3 million of the KeyBank Facility is used to support letters of credit.

Unsecured Term Loans

We also maintain three term loans with a syndicate of banks, led by KeyBank, Wells Fargo, and US Bank, respectively. The KeyBank term loan has a balance of $150 million, matures in 2017, and has a variable interest rate of LIBOR plus a spread of 1.10% to 2.05% based on our credit ratings. The Wells Fargo term loan has a balance of $250 million and matures in 2018. The US Bank term loan has a balance of $150 million and matures in 2020. Both the Wells Fargo and US Bank term loans have variable interest rates of LIBOR plus a spread of 0.90% to 1.90% based on our credit ratings. As of September 30, 2015, the KeyBank term loan was bearing interest at a rate of LIBOR plus 1.35%. As of September 30, 2015, the Wells Fargo and US Bank term loans were bearing interest at a rate of LIBOR plus 1.15%.

Senior Unsecured Notes

We have also issued both public and private unsecured senior notes. As of September 30, 2015, we have approximately $1.0 billion of publicly issued bonds and $310.0 million of private placement notes. These senior unsecured notes are longer term in nature and usually mature within five to 12 years.

Secured Credit Facility

We also maintain a $360.0 million secured credit facility with Prudential Mortgage Capital, which is credit enhanced by Fannie Mae, or the Fannie Mae Facility, of which $320.8 million is collateralized and available to borrow. The Fannie Mae Facility provides for both fixed and variable rate borrowings and has Fannie Mae rate tranches with maturities from 2015 through 2018. The interest rate on the variable portion renews every 90 days and is based on the Fannie Mae discount mortgage backed security rate on the date of renewal, which, for us, has historically approximated three-month LIBOR less an average of 0.17% over the life of the Fannie Mae Facility, plus a fee of 0.62%. Borrowings under the Fannie Mae Facility totaled $320.8 million at September 30, 2015, consisting of $50.0 million under a fixed portion at a rate of 4.7%, and the remaining $270.8 million under the variable rate portion of the Fannie Mae Facility at an average rate of 0.8%. On February 17, 2015, we paid off $91.1 million related to a group of mortgages associated with a previous tax-free Fannie Mae Facility. As part of this transaction, we recorded a $3.1 million loss on debt extinguishment, primarily due to the write-off of unamortized financing costs associated with these mortgages.

Each of our credit facilities is subject to various covenants and conditions on usage, and the secured facility is subject to periodic re-evaluation of collateral. If we were to fail to satisfy a condition to borrowing or in the event of a reduction in real estate values, the available credit under one or more of the facilities could be reduced, which could adversely affect our liquidity. Moreover, if we were to fail to make a payment or violate a covenant under a credit facility, after applicable cure periods, one or more of our lenders could declare a default, accelerate the due date for repayment of all amounts outstanding and/or foreclose on properties securing such facilities. A default on an obligation to repay outstanding debt could also create a cross default on a separate piece of debt, whereby one or more of our lenders could accelerate the due date for repayment of all amounts outstanding and/or foreclose on properties securing the related facilities. Any such event could have a material adverse effect on the Company. We believe that we were in compliance with these covenants and conditions on usage at September 30, 2015.

Secured Property Mortgages

At September 30, 2015, we had $1.1 billion of fixed rate conventional property mortgages with an average interest rate of 3.9% and an average maturity in 2019.

On January 30, 2015, we paid off a $15.2 million mortgage associated with the Farmington Village apartment community. We recorded a $0.2 million loss on debt extinguishment due to paying off the mortgage prior to maturity.

On June 1, 2015, we paid off a $25.5 million mortgage associated with the Colonial Grand at Wilmington apartment community. The payoff was a scheduled maturity of the loan.

On June 15, 2015, we paid off a $10.1 million mortgage associated with the Reserve at Woodwind Lakes apartment community. The payoff was a scheduled maturity of the loan.

On September 1, 2015, we paid off a $11.6 million mortgage associated with the Colonial Village at Timber Crest apartment community. The payoff was a scheduled maturity of the loan.

On September 30, 2015, we paid off a $23.5 million mortgage associated with the Sanctuary at Oglethorpe apartment community. The payoff was a scheduled maturity of the loan.

In addition to these payoffs, we have paid $6.3 million associated with property mortgage principal amortizations.

Guarantees

Of the debt mentioned above, MAA fully and unconditionally guarantees the following debt incurred by MAALP for the full terms of the respective instruments:


•	$360.0 million of the Fannie Mae Facilities, of which $320.8 million has been borrowed as of September 30, 2015;


•	$500.0 million KeyBank credit facility, of which $184.0 million has been borrowed as of September 30, 2015;


•	$310.0 million of senior unsecured notes, all of which has been borrowed as of September 30, 2015; and


•	$550.0 million of term loans, all of which has been borrowed as of September 30, 2015.

Borrowings Overview

The following table summarizes our outstanding debt structure as of September 30, 2015 (dollars in thousands):



	Borrowed Balance		Effective Rate		Average Contract Maturity
Fixed Rate Secured Debt
Individual property mortgages	$	1,052,869	3.9	%	7/10/2019
Fannie Mae Facility	50,000		4.7	%	3/31/2017
Total fixed rate secured debt	$	1,102,869	3.9	%	6/2/2019
Variable Rate Secured Debt ⁽¹⁾
Fannie Mae Facility	270,785		0.8	%	2/18/2017
Total variable rate secured debt	$	270,785	0.8	%	2/18/2017
Total Secured Debt	$	1,373,654	3.3	%	12/20/2018

Unsecured Debt
Variable rate credit facility	$	184,000	1.3	%	8/7/2017
Term loans fixed with swaps	550,000		3.1	%	11/10/2017
Fixed rate senior bonds	1,317,481		4.5	%	12/4/2021
Total Unsecured Debt	$	2,051,481	3.8	%	6/12/2020

Total Outstanding Debt	$	3,425,135	3.6	%	9/18/2019

⁽¹⁾ Includes capped balances.