EastGroup Properties trims bank loan borrowing costs via sustainability-linked adjustments

By Rebecca Melvin

Concord, N.H., July 26 – EastGroup Properties, Inc. announced updated pricing of its credit facility renewal after incorporating a sustainability-linked metric.

The company amended and restated its unsecured revolver and unsecured working cash credit facility in June. The new credit facilities, which were increased to $475 million from $395 million, provide for an incremental reduction in borrowing costs if a certain sustainability-linked metric, measured annually, is achieved.

As a result, the interest rate was reduced to Libor plus 77.5 basis points from Libor plus 100 bps and the annual facility was reduced to 15 bps from 20 bps on the facilities, according to a company news release.

The margin and facility fee are subject to changes in the company’s credit ratings. Although the company's current credit rating is Baa2, given the strength of the company's key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the company's consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%.

In addition, the company announced that it has hired Elizabeth Randall as director of corporate sustainability, effective June 30. As part of the newly created role, Randall will seek to further develop, implement and communicate EastGroup’s environmental, social and governance policies and practices.

EastGroup is a Jackson, Miss.-based real estate investment trust focused on industrial properties.

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