Urban Edge expands revolver to $800 million, extends to 2027

By Marisa Wong

Los Angeles, Aug. 9 – Urban Edge Properties operating partnership Urban Edge Properties LP entered into a first amended and restated revolving credit agreement on Aug. 9 with Wells Fargo Bank, NA as administrative agent to increase the revolving credit facility to $800 million from $600 million, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates the operating partnership’s revolving credit agreement entered into on Jan. 15, 2015.

The restated credit agreement extends the term to Feb. 9, 2027 from Jan. 29, 2024, with two six-month extension options.

The revolver contains an accordion feature, which allows the operating partnership to increase the total amount to $1 billion.

The revolver’s interest rate provisions transitioned from Libor to SOFR.

The applicable margin for SOFR loans is based on the operating partnership’s leverage ratio or, if the company meets the requirements under the credit agreement and so elects, on the credit rating, ranging from 105 basis points to 150 bps. The current applicable margin is 110 bps, based on the leverage ratio.

In addition, the revolver requires the payment of a facility fee of 15 bps to 30 bps on the $800 million committed capacity, without regard to usage. The current facility fee rate is 15 bps, based on the leverage ratio.

The credit agreement provides that the applicable margins may be adjusted upwards or downwards, up to 2 bps, as a result of certain environmental, social and governance targets.

The credit agreement includes a series of financial and other covenants, including that the percentage of total outstanding indebtedness to capitalization value may not exceed 60% (or 65% for up to four consecutive fiscal quarters following any material acquisition); the ratio of combined EBITDA to fixed charges may not be less than 1.50 to 1.00; the ratio of unencumbered combined EBITDA to unsecured interest expense may not be less than 1.50 to 1.00; the percentage of unsecured indebtedness to capitalization value of unencumbered assets, may not exceed 60% (or 65% for up to four consecutive fiscal quarters following any material acquisition); and the ratio of secured indebtedness to capitalization value may not exceed 60%.

Borrowings may be used to finance pre-development costs, development costs, acquisitions, working capital, equity investments, debt investments, capital expenditures and repayment of debt.

No amounts are currently drawn on the facility.

Wells Fargo Securities, LLC and PNC Capital Markets LLC acted as joint bookrunners.

Wells Fargo Securities, PNC Capital Markets, U.S. Bank NA, Truist Securities, Inc. and TD Bank, NA are lead arrangers.

PNC Bank, NA is syndication agent.

U.S. Bank, Truist Bank and TD Bank are documentation agents.

The New York-based real estate investment trust is focused on managing, acquiring, developing and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region.

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