SPIRIT REALTY CAPITAL, INC. - 10-Q filing on 2013-08-09

Notes Payable and Line of Credit	6 Months Ended
Notes Payable and Line of Credit	Jun. 30, 2013
Debt Disclosure [Abstract]
NOTES PAYABLE AND LINE OF CREDIT	NOTES PAYABLE AND LINE OF CREDIT As of June 30, 2013, the Company had $1.8 billion of debt outstanding, consisting of (1) $1.4 billion in fixed rate mortgage loans (the “Fixed Rate Debt”), which included $77.5 million of variable rate debt swapped to fixed rates, (2) $4.3 million in variable rate mortgage loans (the “Variable Rate Debt”) and (3) $319.1 million outstanding under a senior unsecured line of credit entered into on December 17, 2010 (the “Credit Facility”). The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Fixed Rate Debt and the Variable Rate Debt was $2.5 billion as of June 30, 2013. Additionally, the aggregate balance of gross real estate assets that were part of the Credit Facility’s unencumbered borrowing base was $637.6 million. The combined weighted average interest rate was 5.53% and the weighted average years to maturity was 3.1 years as of June 30, 2013. The Credit Facility and certain notes payable contained customary affirmative, negative and financial covenants, including requirements for minimum net worth and debt service coverage ratios, in addition to limits on the Company’s overall leverage ratios and variable rate debt. These agreements also included usual and customary events of default and remedies for facilities of this nature. Based on the Company’s analysis and review of its results of operations and financial condition, the Company believes it was in compliance with the covenants of the Credit Facility and such notes payable as of June 30, 2013. Notes Payable The Fixed Rate Debt had annual interest rates ranging from 3.15% to 7.22%, with a weighted average annual interest rate of 5.68%, and various maturity dates ranging from September 2014 through August 2031. The Variable Rate Debt had an annual interest rate of LIBOR plus 275 basis points, and matures in September 2014. The notes payable were secured by properties in the portfolio and their related tenant leases, as well as other real estate-related assets on which the debt was placed. During the six months ended June 30, 2013, the Company repaid $2.4 million of fixed rate debt, consisting of monthly principal payments on amortizing loans. Line of Credit The Credit Facility provided for up to $350.0 million of unsecured borrowings and allowed the Company to borrow up to $238.9 million in revolving loans (the “Revolving Loans”) and $111.1 million in a term loan (the “Term Loan”). The Credit Facility would have matured on December 17, 2013. During the six months ended June 30, 2013, the Company borrowed and repaid $35.0 million under the Credit Facility. As of June 30, 2013, the Company had $111.1 million outstanding under the Term Loan and an additional $208.0 million in Revolving Loans outstanding. The Company executed an interest rate swap agreement on February 24, 2011, which fixed LIBOR for amounts outstanding under the Term Loan to 1.44%. The all-in rate for the Term Loan includes a spread of 275 to 400 basis points, as determined by the leverage ratio of the Company, which was equal to a spread of 350 basis points as of June 30, 2013. The Revolving Loans outstanding as of June 30, 2013 bore interest at a weighted average interest rate of 5.75%. In connection with the Merger, all amounts outstanding under the Credit Facility were repaid and the related interest rate swap was terminated, as discussed in Note 14 to these condensed consolidated unaudited financial statements.