On January 14, 2016, Avalonbay Communities Inc. entered into a $1,500,000,000 Fourth Amended and Restated Revolving Loan Agreement (the ‘Credit Facility') with Bank of America, N.A., as administrative agent, an issuing bank and a bank, JPMorgan Chase Bank, N.A., as an issuing bank, a bank and a syndication agent, Wells Fargo Bank, N.A., as an issuing bank, a bank and a syndication agent, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers, Barclays Bank PLC, Deutsche Bank AG New York Branch, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., UBS AG, Stamford Branch, PNC Bank, National Association, SunTrust Bank, The Bank of New York Mellon, Branch Banking and Trust Company, The Bank of Tokyo-Mitsubishi UFJ Ltd. and TD Bank, N.A., each as a bank, and the other bank parties signatory thereto. Under the terms of the Credit Facility, the company may elect to increase the facility by up to an additional $500 million, to an aggregate size of $2.0 billion, provided that one or more banks (from the syndicate or otherwise) voluntarily agree to provide the additional commitment. No member of the syndicate of banks can prohibit such increase; such an increase in the facility will only be effective to the extent banks (from the syndicate or otherwise) choose to commit to lend additional funds.

The term of the Credit Facility ends on April 30, 2020 and the company may extend the term for nine additional months provided the company is not then in default and the company representations and warranties are true in all material respects and upon payment of a 10.0 basis point extension fee. The company paid customary arrangement and upfront fees to the lenders in connection with the closing of the Credit Facility. This new facility replaces prior $1.3 billion credit facility dated as of September 29, 2011, as amended.

At the current rating of unsecured and unsubordinated long-term indebtedness, the company will pay participating banks, in the aggregate, an annual facility fee of 0.125% (approximately $1,875,000 based on the $1.5 billion size). The Credit Facility bears interest at varying levels based on (1) the London Interbank Offered Rate (‘LIBOR'), (2) the rating levels issued for unsecured and unsubordinated long-term indebtedness and (3) a maturity schedule selected by us. The current stated pricing for drawn borrowings is LIBOR plus 0.825% per annum.

The stated spread over LIBOR can vary from LIBOR plus 0.80% to LIBOR plus 1.55% based upon the rating of unsecured and unsubordinated long-term indebtedness. In addition, a competitive bid option is available for borrowings of up to 65% of the Credit Facility amount. This option allows banks that are part of the lender consortium to bid to provide loans at a rate that is lower than the stated pricing provided by the Credit Facility.

The competitive bid option may result in lower pricing than the stated rate if market conditions allow. Under the Credit Facility the company is subject to certain customary covenants, including, but not limited to, maintaining certain coverage ratios such as total outstanding indebtedness to capitalization value, combined EBITDA to combined debt service, secured indebtedness to capitalization value and unsecured indebtedness to unencumbered asset value. At the commencement of the Credit Facility, there were no loans outstanding on the line and approximately $44.8 million was used to provide letters of credit.

Accordingly, approximately $1.46 billion was available for borrowing.