Annual report pursuant to Section 13 and 15(d)

DEBT FINANCING

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DEBT FINANCING
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
DEBT FINANCING
DEBT FINANCING
The Company's outstanding debt as of December 31, 2015 and 2014 is summarized as follows (dollars in thousands):
 
Interest
 
December 31,
 
Rate (1)
 
2015
 
2014
Credit Facility:
 
 
 
 
 
Revolving line of credit
2.03%
 
$
187,975

 
$
166,217

Term loan
2.75%
 
200,000

 
144,558

Unsecured term loan
 

 
50,000

Fixed rate mortgages payable
3.93%
 
182,637

 
153,416

Variable rate mortgages payable
 

 
83,500

Total
 
 
$
570,612

 
$
597,691


(1) 
Represents the effective interest rate as of December 31, 2015. Effective interest rate incorporates the stated rate plus the impact of interest rate cash flow hedges and discount and premium amortization, if applicable. For the revolving line of credit, the effective interest rate excludes fees for unused borrowings. 
Credit Facility
On August 13, 2015, the Company entered into an amendment with a syndicated group of lenders consisting of 11 financial institutions to increase the total borrowing capacity under its unsecured credit facility (the "credit facility"), which was originally entered into on April 1, 2014, by $125.0 million for a total credit facility of $550.0 million. The Company has an additional expansion option under the credit facility, which if exercised, would provide for a total borrowing capacity of $700.0 million. The credit facility consists of two components:
A senior revolving credit facility (the "revolving line of credit"), which provides for a total borrowing commitment up to $350.0 million, whereby the Company may borrow, repay and re-borrow amounts under the revolving line of credit. The borrowing commitment is subject to a borrowing base calculation, which only includes self storage properties with an occupancy rate of at least 75% on a combined basis. As of December 31, 2015, we had the capacity to borrow an additional $162.0 million, subject to the borrowing base calculation. The Company is required to pay a fee which ranges from 0.20% to 0.25% of unused borrowings under the revolving line of credit. As of December 31, 2015, the pricing grid under the revolving line of credit provides for an interest rate equal to one-month London Interbank Offered Rate ("LIBOR") plus 1.60%. The revolving line of credit matures in March 2017 and the Company may elect an extension of the maturity date until March 2018 by paying an extension fee equal to 0.20% of the total borrowing commitment at the time of the extension.
A $200.0 million senior term loan (the "term loan") which provides that amounts borrowed may be repaid at any time but not re-borrowed. As of December 31, 2015, the pricing grid under the term loan provides for an interest rate equal to one-month LIBOR plus 1.50%. No principal payments are required under the term loan until the maturity date in March 2018.
The terms of the credit facility limit the Company's ability to make distributions, incur additional debt, and acquire or sell significant assets. The credit facility requires compliance with certain financial and non-financial covenants, including a maximum total leverage ratio, a minimum fixed charge coverage ratio, and minimum net worth, which were not impacted by the increase amendment discussed above. At December 31, 2015, the Company was in compliance with all such covenants.
Unsecured Term Loan
On April 1, 2014, the Company entered into a senior unsecured term loan (the "unsecured term loan") with a syndicated group of lenders consisting of three financial institutions. The unsecured term loan provided for maximum borrowings of $50.0 million. The loan originally matured on April 1, 2015 but was extended until October 1, 2015 in exchange for a prescribed fee of $250,000. There was a mandatory repayment of this loan upon the occurrence of a capital event (such as completion of the Company's initial public offering) as defined in the loan agreement, and following the completion of our initial public offering during the year ended December 31, 2015, we used a portion of the net proceeds from our initial public offering to repay the $50.0 million unsecured term loan. The repayment resulted in a $0.2 million write-off of unamortized debt issuance costs. Prior to the repayment, payments were limited to interest only, to be paid on a monthly basis, and the outstanding principal balance bore interest at one-month LIBOR plus 5.00%.
Fixed Rate Mortgages Payable
Fixed rate mortgages have scheduled maturities at various dates through November 2024, and have effective interest rates that range from 2.20% to 5.00%. Principal and interest are generally payable monthly or in monthly interest-only payments with balloon payments due at maturity. As discussed in Note 6, we assumed fixed rate mortgages of $73.5 million in connection with 31 of the properties acquired during the year ended December 31, 2015 and $65.8 million in connection with 16 of the properties acquired during the year ended December 31, 2014. We repaid $34.7 million of these assumed mortgages during the year ended December 31, 2015.
Variable Rate Mortgages Payable
Variable rate mortgages had contractual maturities at various dates through October 2015, and had effective interest rates that ranged from 2.43% to 9.65%. Following the completion of our initial public offering during the year ended December 31, 2015, we used a portion of the net proceeds from our initial public offering to repay all $83.5 million of the outstanding variable rate mortgages. In connection with the repayments, the Company incurred a $0.5 million prepayment penalty and recorded a $0.2 million write-off of unamortized debt issuance costs. Prior to the repayment, principal and interest on this debt was generally payable in monthly interest-only payments with balloon payments due at maturity.
Future Debt Maturities
Based on existing debt agreements in effect as of December 31, 2015, the future maturities of outstanding borrowings under the Company's credit facility and fixed rate mortgages are presented in the table below (in thousands):
Year Ending December 31,
 
Contractual Principal
 
Premium Amortization
 
Total
2016
 
$
14,130

 
$
1,697

 
$
15,827

2017
 
204,129

 
1,100

 
205,229

2018
 
209,192

 
985

 
210,177

2019
 
3,468

 
917

 
4,385

2020
 
37,635

 
564

 
38,199

After 2021
 
96,332

 
463

 
96,795

 
 
$
564,886

 
$
5,726

 
$
570,612