Carter Validus gets up to $520 million term loan, amends facility

By Angela McDaniels

Tacoma, Wash., Aug. 13 – Carter Validus Mission Critical REIT II, Inc. entered into an up to $520 million term loan due Dec. 31, 2024 and amended its existing credit facility on Aug. 7, according to an 8-K filing with the Securities and Exchange Commission.

Subject to certain conditions, the term loan can be increased to $600 million prior to Dec. 31, 2023.

The initial interest rate is Libor plus 215 basis points. The margin ranges from 175 bps to 225 bps depending on the ratio of the company’s consolidated total debt to its gross asset value.

BBVA USA, BMO Capital Markets, Capital One, NA and SunTrust Bank are the co-syndication agents. Keybanc Capital Markets Inc., BMO, BBVA USA, Capital One and SunTrust Robinson Humphrey, Inc. are the joint lead arrangers. Keybanc Capital Markets is the bookrunner. BMO Harris Bank, NA and Fifth Third Bank are the co-documentation agents.

The term loan is anticipated to be funded once the company’s acquisition of Carter Validus Mission Critical REIT, Inc. is completed.

The company terminated the $475 million senior secured bridge loan it had arranged in connection with the execution of the merger agreement.

The amendment to the existing credit facility increased the maximum commitments to $780 million from $700 million and changed the borrower to Carter Validus Mission Critical REIT II from Carter Validus Operating Partnership II, LP, which is now a guarantor.

The maximum commitments consist of a $500 million revolving line of credit due April 27, 2022, subject to the company's right to one 12-month extension period, and a $280 million term loan due April 27, 2023.

The actual amount of credit available under the credit facility is a function of some loan-to-cost, loan-to-value and debt service coverage ratios. The amount of credit available will be a maximum principal amount of the value of the assets that are included in the pool availability.

The amendment also removed some security language related to restrictions on debt and restrictions on liens, amends the "change of control" language and adds some language describing the process required to determine a replacement index in anticipation of the discontinuance of Libor loans.

As of Friday, Carter Validus Operating Partnership II had a total pool availability under the credit facility of $523.78 million and an aggregate outstanding principal balance of $370 million, and $153.78 million remained to be drawn.

Once the merger is completed, Carter/Validus Operating Partnership, LP and Carter Validus Mission Critical REIT will become guarantors under the credit facility, and some, but not all, Carter Validus Mission Critical REIT real estate properties will be included in the "pool properties," as defined in the credit agreement for the credit facility.

KeyBank NA is the administrative agent for the amended credit facility and the term loan.

Carter Validus is a Tampa, Fla.-based real estate investment trust with a focus on data center and medical properties.

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