iStar lifts spread on $1.5 billion term A-2 to Libor plus 550 bps

By Sara Rosenberg

New York, March 10 - iStar Financial Inc. increased pricing on its $1.5 billion term loan A-2 (B2/NA/B+) due June 2014 to Libor plus 550 basis points from Libor plus 475 bps, according to a market source.

Also, the term loan A-2 saw the addition of 101 soft call protection for one year and par ½ soft call protection for the following six months, the source said.

The 1.25% Libor floor and original issue discount of 98½ were left intact.

The company's $3 billion senior secured credit facility also includes a $1.5 billion term loan A-1 (B1/NA/BB-) due June 2013 that was left unchanged at Libor plus 325 bps with a 1.25% Libor floor and an original issue discount of 991/2, the source added.

Amortization payments will be applied first to the A-1 tranche and then to the A-2 tranche.

J.P. Morgan and Barclays Capital are the lead bank on the deal.

Proceeds will be used to refinance the company's secured loan facilities due in June 2011 and 2012, as well as to repay a portion of its unsecured debt maturing in 2011.

Security is a first lien on a diversified $3.75 billion collateral pool, comprised primarily of performing loans and corporate tenant lease assets.

iStar is a New York-based finance and investment company focused on the commercial real estate industry.

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