Public Storage 2009 Annual Report Download - page 108

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2009
F-21
6. Line of Credit and Notes Payable
At December 31, 2009, we have a revolving credit agreement (the “Credit Agreement”) which expires on March 27,
2012, with an aggregate limit with respect to borrowings and letters of credit of $300 million. Amounts drawn on the Credit
Agreement bear an annual interest rate ranging from the London Interbank Offered Rate (“LIBOR”) plus 0.35% to LIBOR plus
1.00% depending on our credit ratings (LIBOR plus 0.35% at December 31, 2009). In addition, we are required to pay a quarterly
facility fee ranging from 0.10% per annum to 0.25% per annum depending on our credit ratings (0.10% per annum at
December 31, 2009). We had no outstanding borrowings on our Credit Agreement at December 31, 2009 or at February 26,
2010. At December 31, 2009, we had undrawn standby letters of credit, which reduce our borrowing capability with respect to
our line of credit by the amount of the letters of credit, totaling $18,270,000 ($17,736,000 at December 31, 2008).
The carrying amounts of our notes payable at December 31, 2009 and 2008 consist of the following (dollar amounts in
thousands):
December 31, 2009
December 31, 2008
Carrying
amount
Fair
Value
Carrying
amount
Fair
Value
Unsecured Notes Payable:
5.875% effective and stated note rate, interest only and payable semi-
annually, matures in March 2013 ..........................................................
$ 186,460
$ 183,204
$ 200,000
$ 197,995
5.7% effective rate, 7.75% stated note rate, interest only and payable
semi-annually, matures in Febr
uary 2011 (carrying amount includes
$1,889 of unamortized premium at December 31
, 2009 and $7,433
at December 31, 2008) .........................................................................
105,206
104,545
207,433
208,903
Secured Notes Payable:
5.5% average effective rate fixed rate mortgage notes payable, secured
by 89 real estate facilities with a net book value of approximately
$562 million at December 31, 2009 and stated note rates between
4.95% and 8.00%, maturing at varying dates between January 2010
and September 2028 (carrying amount includes $3,983 of
unamortized premium at December 31, 2009 and $5,634 at
December 31, 2008) .............................................................................
227,223
238,134
236,378
243,638
Total notes payable ........................................................................
$ 518,889
$ 525,883
$ 643,811
$ 650,536
Substantially all of our debt was acquired in connection with a property or other acquisition, and in such cases an initial
premium or discount is established for any difference between the stated note balance and estimated fair value. This initial
premium or discount is amortized over the remaining term of the notes using the effective interest method. Estimated fair values
are based upon discounting the future cash flows under each respective note at an interest rate that approximates those of loans
with similar credit characteristics and term to maturity. These inputs for fair value represent significant unobservable inputs,
which are “Level 3” inputs as the term is defined in the Codification.
On February 12, 2009, we acquired $110,223,000 face amount ($113,736,000 book value) of our existing unsecured
notes pursuant to a tender offer for an aggregate of $109,622,000 in cash (including costs associated with the tender of $414,000)
plus accrued interest. In connection with this transaction, we recognized a gain of $4,114,000 for the year ended December 31,
2009, representing the difference between the book value of $113,736,000 and the retirement amount paid plus tender offer costs.
Our notes payable and our Credit Agreement each have various customary restrictive covenants, all of which have been
met at December 31, 2009.