INDEBTEDNESS

Overview

Indebtedness consists of mortgage loans, unsecured notes, and borrowings under a credit facility. The weighted average interest rates for the years ended December 31, 2013, 2012 and 2011 were 5.1%, 5.3% and 5.8%, respectively. Interest costs during the years ended December 31, 2013, 2012 and 2011 in the amount of $9.6 million, $9.9 million and $3.0 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2013, 2012 and 2011 was $143.2 million, $132.2 million and $134.3 million, respectively.

The Company is subject to financial covenants contained in some of its debt agreements, the most restrictive of which are detailed below under the heading "Credit Facility." As of December 31, 2013, the Company was in compliance with all financial covenants.

The scheduled principal amortization and maturities of the Company's mortgage loans, unsecured notes outstanding and the Credit Facility (as defined below) and the related weighted average interest rates at December 31, 2013 are as follows (in thousands, except percentages):



											Weighted
	Mortgages										Average
	Principal		Principal		Unsecured		Credit				Interest
	Amortization		Maturities		Notes		Facility		Total		Rate

2014	$	11,088	$	2,696	$	199,953	$	—	$	213,737	5.63	%
2015	12,138		44,469		315,869		—		372,476		5.16	%
2016	11,720		182,318		299,362		—		493,400		6.08	%
2017	10,916		2,349		295,861		—		309,126		6.57	%
2018	8,730		27,051		99,968		—		135,749		6.80	%
2019	8,680		50,043		—		—		58,723		3.99	%
2020	4,280		67,361		349,441		—		421,082		4.83	%
2021	2,716		65,008		—		—		67,724		4.06	%
2022	2,172		—		399,342		—		401,514		4.14	%
2023 and thereafter	29,625		1,946		748,417		—		779,988		4.03	%
	$	102,065	$	443,241	$	2,708,213	$	—	$	3,253,519	5.05	%

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2014 to 2033 are collateralized by and in some instances cross-collateralized by properties with a net book value of $997.3 million as of December 31, 2013.

The interest rates on $3,237.5 million of mortgage loans (including $105.2 million fixed via a swap arrangement - see Footnote 21 - Derivative Instruments) and unsecured notes are fixed and range from 3.0% to 7.5%. The weighted average remaining term for the mortgage loans and unsecured notes is 5.9 years.

Credit Facility

The Company has maintained an unsecured credit facility throughout 2011, 2012 and 2013. During that period the Company has replaced, restated and amended its credit facility. This activity has resulted in changes to due dates, borrowing costs and covenant calculations. As replaced, restated and amended these credit facilities are referred to below as the "Credit Facility." The interest rate on borrowings under the Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc., Standard and Poor’s Ratings Group and Fitch, Inc. Based on the Company's ratings as of December 31, 2013, borrowings under the Credit Facility would bear interest at LIBOR plus 107.5 basis points. The Credit Facility expires in November 2015 and has a one-year extension option at the Company's option, subject to the payment of a stated fee. The Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. There were no borrowings outstanding under the Credit Facility at December 31, 2013. There is also a 20 basis point annual facility fee on the current borrowing capacity. The Credit Facility contains financial covenants, certain of which are set forth below:


•	total debt to total assets may not exceed 0.60:1;


•	earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;


•	unsecured debt to unencumbered asset value must equal or be less than 60%; and


•	unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Activity

In September 2013, the Company issued $450.0 million of 4.40% senior unsecured notes due 2024. The net proceeds from the offering were used to fund a portion of the cash consideration payable for the Cabot Acquisition (see Note 20).

In October 2013, as part of the Cabot Acquisition, the Company assumed $229.8 million in mortgages bearing interest at a weighted average rate of 5.85% with maturity dates from 2018 to 2021.

In February 2012, the Company closed on a mortgage with $45.0 million of available funds bearing interest at 4.84% and maturing in 2033. As of December 31, 2013, there was $44.5 million outstanding on this loan. The net proceeds from this mortgage were used for construction costs on a property under development that was placed in service during the year ended December 31, 2013.

In June 2012, the Company issued $400.0 million of 4.125% senior unsecured notes due 2022. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.

In August 2012, the Company used proceeds from its unsecured credit facility together with available cash on hand to repay $230.1 million of 10-year, 6.375% senior unsecured notes due August 2012.

In December 2012, the Company issued $300.0 million of 3.375% senior unsecured notes due 2023. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.

During the year ended December 31, 2011, the Company used proceeds from its Credit Facility together with available cash on hand to repay $246.5 million principal value of 7.25% senior notes.