Lines of Credit and Notes Payable

6 Months Ended

Jun. 30, 2014

Line of Credit and Notes Payable

As of June 30, 2014 and December 31, 2013, Signature Office REIT had the following indebtedness outstanding:



	Outstanding Balance as of
Facility	June 30, 2014		December 31, 2013
Signature Revolving Facility	$	62,900,000	$	42,500,000
Signature Term Loan	100,000,000		100,000,000
Technology Way Loan	—		24,900,000
Total indebtedness	$	162,900,000	$	167,400,000

Signature Unsecured Debt Facility

Signature Office REIT is a party to an unsecured credit facility (the "Signature Unsecured Debt Facility") with a syndicate of banks led by Regions Bank ("Regions"), U.S. Bank National Association ("U.S. Bank"), and JPMorgan Chase Bank, N.A. ("JPMorgan"). Under the Signature Unsecured Debt Facility, Signature Office REIT may borrow up to a total of $300 million (the "Facility Amount"), subject to availability. The Facility Amount is comprised of a revolving credit facility in an amount up to $200 million (the "Signature Revolving Facility") and a term loan facility in an amount up to $100 million (the "Signature Term Loan"). The Signature Revolving Facility and the Signature Term Loan will be due and payable in full on September 26, 2015 and September 26, 2017, respectively, subject to certain extension options. The proceeds of the Signature Unsecured Debt Facility may be used by Signature Office REIT to acquire properties and for working capital, capital expenditures and other general corporate purposes. Draws under the Signature Unsecured Debt Facility are supported by properties directly owned by the Signature Office REIT's subsidiaries that Signature Office REIT has elected to add to the borrowing base. These borrowing base properties are not available to be used as collateral for any other debt arrangements. Proceeds from the Signature Revolving Facility were used to repay the Technology Way Loan in full upon its maturity on June 27, 2014.

The Signature Unsecured Debt Facility contains certain restrictive covenants. As of June 30, 2014, Signature Office REIT believes it was in compliance with all financial covenants of its outstanding debt obligations.

Fair Value of Outstanding Debt

As of June 30, 2014 and December 31, 2013, the fair value of Signature Office REIT's total indebtedness approximated its carrying value. Signature Office REIT estimated the fair values of its debt instruments based on discounted cash flow analysis using the current incremental borrowing rates for similar types of borrowing arrangements obtained from multiple market participants as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

Weighted-Average Interest Rate and Interest Paid

As of June 30, 2014 and December 31, 2013, the weighted-average interest rate on Signature Office REIT's outstanding debt, after consideration of the interest rate swap, was approximately 2.18% and 2.22%, respectively. Signature Office REIT made the following interest payments on its borrowings:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Signature Revolving Facility	$	342,748	$	529,776	$	688,770	$	1,107,194
Signature Term Loan	456,667		489,972		915,039		944,639
Technology Way Loan	175,683		140,105		271,403		277,524
	$	975,098	$	1,159,853	$	1,875,212	$	2,329,357

No interest was capitalized during the six months ended June 30, 2014 and 2013.

- 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

SIGNATURE OFFICE REIT INC 10-Q