Debt Instrument (Unsecured Senior Notes and Unsecured Line of Credit) (Unsecured Debt [Member])

12 Months Ended

Dec. 31, 2013

Unsecured Debt [Member]

7. Unsecured Senior Notes and Unsecured Line of Credit

The following table pertains to BRE’s unsecured senior notes and unsecured line of credit. Weighted average interest rate includes amortization of all loan fees as related to unsecured notes and the revolving credit facility (facility fees calculated on the capacity of the unsecured revolving credit facility).

The following is a summary of BRE’s unsecured debt:




		As of December 31,
	Maturity		2013		2012
2013 7.125% Senior Note	February 2013	$	-	$	40,018,000
2014 4.700% Senior Note	March 2014		50,000,000		50,000,000
2017 5.500% Senior Note	March 2017		300,000,000		300,000,000
2021 5.200% Senior Note	March 2021		300,000,000		300,000,000
2023 3.375% Senior Note	January 2023		300,000,000		300,000,000
Fixed rate unsecured notes		$	950,000,000	$	990,018,000
Unsecured revolving credit facility			98,000,000		—
Total unsecured debt		$	1,048,000,000	$	990,018,000
Weighted average interest rate on fixed rate unsecured notes			4.81%		4.91%
Weighted average interest rate on unsecured revolving credit facility			1.83%		1.90%

Fixed Rate Unsecured Notes

On February 15, 2013, the Company’s 7.130% senior notes came due and the aggregate principal balance of $40,018,000 was paid in full.

On August 13, 2012, the Company completed an offering of $300,000,000, 10.5 year senior unsecured notes. The notes will mature on January 15, 2023 and bear interest at a fixed coupon rate of 3.375%. Net proceeds from the offering, after all discounts, commissions, and issuance costs totaled approximately $295,400,000 and were used for general corporate purposes including reducing the Company’s revolving credit facility balance.

During February 2012, the Company exercised its right to redeem for cash all of the convertible senior unsecured notes outstanding, at a redemption price equal to 100% of the principal amount of the notes outstanding, plus accrued and unpaid interest up to, but excluding, February 21, 2012 (the “Redemption Date”).

Unsecured Line of Credit

On January 5, 2012, the Company entered into a new $750,000,000 unsecured revolving credit facility (the “Credit Agreement”). The Credit Agreement has an initial term of 39 months, terminates on April 3, 2015 and replaces its previous $750,000,000 revolving credit facility. Based on its current debt ratings, the unsecured revolving credit facility accrues interest at LIBOR plus 120 basis points. In addition, the Company pays a 0.20% annual facility fee on the total commitment of the facility. Borrowings under its unsecured revolving credit facility totaled $98,000,000 at December 31, 2013 and $0 at December 31, 2012. Borrowings under the unsecured revolving credit facility are used to fund acquisition and development activities as well as for general corporate purposes. Balances on the unsecured revolving credit facility are typically reduced with available cash balances.

The unsecured revolving credit facility and unsecured senior note agreements contain various covenants that include, among other factors, tangible net worth and requirements to maintain certain financial ratios. BRE was in compliance with all such financial covenants throughout the years ended December 31, 2013 and 2012.

Scheduled principal payments required on the unsecured revolving credit facility, unsecured notes and mortgage loans payable for the next five years and thereafter are as follows (amounts in thousands). Weighted average rate represents the weighted average coupon interest rates of the debt securities in the year in which they become due:



						Mortgage loans payable
Year of maturity		Unsecured senior notes		Unsecured revolving credit facility		Amortization		Balloon		Total mortgage loans payable		Total debt	Weighted Avg Rate
2014	$	50,000	$	-	$	4,090	$	-	$	4,090	$	54,090	4.77%
2015		-		98,000		8,329		-		8,329		106,329	1.70%
2016		-		-		8,712		-		8,712		8,712	5.64%
2017		300,000		-		8,986		-		8,986		308,986	5.50%
2018		-		-		10,218		-		10,218		10,218	5.63%
2019		-		-		6,515		317,975		324,490		324,490	5.59%
2020		-		-		2,957		343,646		346,603		346,603	5.61%
2021		300,000		-		-		-		-		300,000	5.20%
2022		-		-		-		-		-		-	0.00%
2023		300,000		-		-		-		-		300,000	3.38%
	$	950,000	$	98,000	$	49,807	$	661,621	$	711,428	$	1,759,428	4.86%

The following is a summary of interest expense on mortgage loans, revolving credit facility and unsecured senior notes, including amortization of related issuance costs:



	Year ended December 31,
	2013		2012		2011
Total interest incurred (excluding discontinued operations)	$	90,338,000	$	88,431,000	$	87,682,000
Capitalized interest		(24,471,000)		(21,633,000)		(14,431,000)
Total interest expense	$	65,867,000	$	66,798,000	$	73,251,000
Total cash paid for interest	$	90,696,000	$	86,988,000	$	90,007,000
Total cash paid for interest, net of capitalized interest	$	66,225,000	$	65,355,000	$	75,576,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

BRE PROPERTIES INC /MD/ 10-K