Independence Realty refinances with $350 million four-year revolver

By Angela McDaniels

Tacoma, Wash., May 9 – Independence Realty Trust, Inc. announced that its operating partnership, Independence Realty Operating Partnership, LP, closed on a new $350 million revolving credit facility refinancing the previous credit facility.

The maturity date is May 9, 2023, according to an 8-K filing with the Securities and Exchange Commission.

The borrower has the option to extend the revolver for two additional six-month periods subject to terms and conditions, including payment of an extension fee.

The new credit facility increases the size of the revolver by $50 million, extends maturities by two years to May 2023 and lowers borrowing costs, according to a company news release.

The initial interest rate under the new credit facility is Libor plus 155 basis points. The margin ranges from 125 bps to 200 bps, based on the company’s leverage ratio. The company said this is a reduction in the spread of 5 bps.

The credit facility also includes a $250 million accordion feature. Any such increase must be in increments of at least $25 million and may be designated as a single five-year incremental term loan.

Up to 10% of the revolver is available for swingline loans, and up to 10% is available for the issuance of letters of credit.

The revolver requires monthly payments of interest only but requires mandatory prepayments under some circumstances.

Citibank, NA and KeyBanc Capital Markets are the joint bookrunners. Citibank, KeyBanc Capital Markets and Huntington National Bank are the joint lead arrangers. KeyBank NA is the administrative agent. Citibank and Huntington are co-syndication agents. Bank of America, NA, Capital One, NA, Citizens Bank, NA, Comerica Bank, PNC Bank, NA, Regions Bank and SunTrust Bank are co-documentation agents.

The existing lender group and new institutional banks participated in the new credit facility.

Initial borrowings under the new credit facility were used to pay closing costs and repay the outstanding balance of the prior credit agreement, leaving about $218.1 million of undrawn capacity.

Independence Realty is a Philadelphia-based real estate investment trust that owns apartment properties.

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