PREIT (NYSE: PEI) today announced a milestone achievement in its balance sheet strengthening effort - the execution of a modification and extension of its $400 million unsecured Revolving Credit Facility and two of its $150 million 5-Year Term Loans with terms and conditions substantially the same as its existing loans, now maturing in 2023. The Company has completed over $1 billion in transactions in the financing market thus far in 2018, highlighting its ability to access the capital markets. One of the key tactics in PREIT's balance sheet strategy is maintaining a well-laddered maturity schedule, which is complemented by this transaction as the Company now boasts no material debt maturities until 2021.
Key Terms of the transactions are as follows:
- Revolver
- Amount is unchanged at: $400 million
- Term: 4 years plus 1 year extension option (maturity in 2023)
- Interest rate is unchanged at: LIBOR plus a range of 120-155 bps, based on a calculation of Liabilities to Gross Asset Value ("GAV"). Based on the Company's current leverage, the rate is 130 bps over LIBOR
- Capitalization rates used to calculate GAV are unchanged at:
- Properties with sales over $500/sf: 6.5%
- Properties with sales below $500/sf: 7.5%
- Aggregate amount is unchanged at: $300 million
- Term: 5 years (maturity in 2023)
- Interest rate is unchanged at: LIBOR plus a range of 135-190 bps, based on a calculation of Liabilities to GAV. Based on the Company's current leverage, the rate is 160 bps over LIBOR
- Capitalization rates used to calculate GAV are unchanged at:
- Properties with sales over $500/sf: 6.5%
- Properties with sales below $500/sf: 7.5%
"We are extremely pleased to have completed these transactions at favorable terms ahead of their scheduled maturities. The quality of our portfolio and the Company's value proposition is clearly understood and appreciated by the credit markets," said PREIT CEO Joseph F. Coradino. "We believe that securing this level of capital and maintaining both cap rates and interest rate spreads are the manifestation of our Company's transformation and we are appreciative for the continued support of our bank group."
Wells Fargo Securities, LLC, U.S. Bank National Association, Citizens Bank, N.A., PNC Bank National Association, and MUFG Union Bank, N.A. were joint lead arrangers for these transactions.
About PREIT PREIT (NYSE: PEI) is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely-populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. Additional information is available at www.preit.com or on Twitter or LinkedIn.
