SPIRIT REALTY CAPITAL, INC. - 10-Q filing on 2015-08-07

Debt (Tables)

6 Months Ended

Jun. 30, 2015

The Company's debt is summarized below:



	Weighted Average Effective Interest Rates ⁽¹⁾		Weighted Average Stated Rates ⁽²⁾		Weighted Average Term ⁽³⁾	June 30, 2015			December 31, 2014
					(in Years)	(In Thousands)
Revolving Credit Facilities	NM		1.89	%	3.8	$	20,000		$	15,181
Master Trust Notes	5.44	%	5.04	%	7.7	1,701,371			1,710,380
CMBS - fixed-rate	5.45	%	5.88	%	2.9	1,554,414			1,836,181
CMBS - variable-rate⁽⁴⁾	3.42	%	3.55	%	3.2	68,345			110,685
Convertible Notes	4.86	%	3.28	%	4.8	747,500			747,500
Unsecured fixed rate promissory note	9.12	%	7.00	%	6.5	1,232			1,293
Total Debt	5.33	%	5.00	%	5.3	4,092,862			4,421,220
Debt discount, net						(54,247		)	(51,586		)
Deferred financing costs, net ⁽⁵⁾						(42,870		)	(46,332		)
Total debt, net						$	3,995,745		$	4,323,302

⁽¹⁾ The effective interest rates include amortization of debt discount, amortization of deferred financing costs and non-utilization fees, where applicable, calculated for the three months ended June 30, 2015 and based on the average principal balance outstanding during the period. The average outstanding principal balance of the Revolving Credit Facilities was not significant during the three months ended June 30, 2015, resulting in an effective interest rate that was not meaningful.

⁽²⁾ Represents the weighted average stated interest rate based on the outstanding principal balance as of June 30, 2015.

⁽³⁾Represents the weighted average time to maturity based on the outstanding principal balance as of June 30, 2015.

⁽⁴⁾ Variable-rate notes are predominantly hedged with interest rate swaps (see Note 5).

⁽⁵⁾ The Company early adopted ASU 2015-03 requiring deferred financing costs to be presented as a direct deduction from the carrying amount of the related indebtedness. The Company records deferred financing costs for its 2013 Credit Facility and 2015 Credit Facility in deferred costs and other assets, net on its consolidated balance sheets.

Schedule of Debt Maturities

As of June 30, 2015, scheduled debt maturities of the Company’s Revolving Credit Facilities, mortgages and notes payable and Convertible Notes, including balloon payments, are as follows (in thousands):



	Scheduled Principal		Balloon Payment		Total
Remainder of 2015 ⁽¹⁾	$	14,127	$	95,051	$	109,178
2016	28,170		273,059		301,229
2017	27,952		797,827		825,779
2018	42,297		244,537		286,834
2019	44,520		472,000		516,520
Thereafter	289,321		1,764,001		2,053,322
Total	$	446,387	$	3,646,475	$	4,092,862

⁽¹⁾ The balloon payment balance in 2015 includes $79.0 million, including $5.7 million of capitalized interest, for the acceleration of principal payable following an event of default under four separate non-recourse CMBS loans with stated maturities in 2015 and 2017 of $25.3 million and $53.7 million, respectively.

Summary of Components of Interest Expense Related to Borrowings

The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
Interest expense – Revolving Credit Facilities ⁽¹⁾	$	586	$	1,100		$	1,389	$	1,820
Interest expense – mortgages and notes payable	46,863		50,778			95,271		104,374
Interest expense – Convertible Notes	6,128		2,871			12,255		2,871
Interest expense – other	—		—			—		6
Non-cash interest expense:
Amortization of deferred financing costs	1,901		1,324			3,973		2,297
Amortization of net losses related to interest rate swaps	26		33			54		66
Amortization of debt (premium)/discount	663		(114		)	1,139		(1,043		)
Total interest expense	$	56,167	$	55,992		$	114,081	$	110,391

⁽¹⁾ Includes interest expense associated with non-utilization fees of approximately $0.4 million and $0.3 million for the three months ended June 30, 2015 and 2014, respectively, and approximately $0.8 million and $0.6 million for the six months ended June 30, 2015 and 2014, respectively.

Master Trust Notes

Debt Instrument [Line Items]

Summary of Debt

The Master Trust Notes are summarized below:



	Effective Interest Rates ⁽¹⁾		Stated Rates ⁽²⁾		Remaining Term	June 30, 2015			December 31, 2014
					(in Years)	(in Thousands)
Series 2014-1 Class A1	6.0	%	5.1	%	5.0	$	70,336		$	75,489
Series 2014-1 Class A2	6.0	%	5.4	%	5.1	253,300			253,300
Series 2014-2	6.1	%	5.8	%	5.7	231,294			232,867
Series 2014-3	6.0	%	5.7	%	6.7	312,494			312,705
Series 2014-4 Class A1	3.9	%	3.5	%	4.6	150,000			150,000
Series 2014-4 Class A2	4.8	%	4.6	%	14.6	360,000			360,000
Total Master Trust 2014 notes	5.5	%	5.1	%	8.0	1,377,424			1,384,361
Series 2013-1 Class A	4.6	%	3.9	%	3.5	125,000			125,000
Series 2013-2 Class A	5.6	%	5.3	%	8.5	198,947			201,019
Total Master Trust 2013 notes	5.2	%	4.7	%	6.5	323,947			326,019
Total Master Trust Notes						1,701,371			1,710,380
Debt discount, net						(24,921		)	(26,903		)
Deferred financing costs, net						(20,809		)	(22,113		)
Total Master Trust Notes, net						$	1,655,641		$	1,661,364

⁽¹⁾ The effective interest rates include amortization of debt discount and amortization of deferred financing costs calculated for the three months ended June 30, 2015 based on the average principal balance outstanding during the period.

⁽²⁾ Represents the individual series stated interest rate as of June 30, 2015 and the weighted average stated rate of the total Master Trust Notes, based on the collective series outstanding principal balances as of June 30, 2015.