Alexander & Baldwin extends revolving facility to 2020, trims pricing

By Marisa Wong

Morgantown, W.Va., Dec. 15 – Alexander & Baldwin, Inc. amended its $350 million revolving credit facility with Bank of America, NA and First Hawaiian Bank on Dec. 10 to extend the term of the revolver to December 2020, adjust interest rates and modify some covenants, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate was reduced to Libor plus 135 basis points to 215 bps from Libor plus 150 bps to 250 bps. The commitment fee was also lowered to a range of 15 bps to 30 bps from a range of 15 bps to 35 bps. Pricing is based on the company’s total debt to total adjusted asset value ratio.

The main covenant changes include:

• Increasing the maximum percentage of unsecured debt to unencumbered income producing assets value to 60% from 57%;

• Reducing the applicable cap rate applied to income-producing assets included in unencumbered income producing assets value of between 25 bps and 50 bps, which increases the covenant value of these income-producing assets;

• Adding real estate development assets and real estate investments in the unencumbered income producing assets value, subject to an overall limitation of 15% of total unencumbered income producing assets value;

• Increasing the maximum amount of investments in third-party notes and mezzanine investments to 5% of total adjusted assets value; and

• Adding back some non-recurring, one-time expenses to EBITDA.

On Dec. 10 the company also amended and restated its private shelf agreement with Prudential Investment Management, Inc. The second amended and restated agreement renews the company’s existing $300 million private placement note, increasing the uncommitted amount to $450 million. The amended agreement expires on Dec. 10, 2018.

Alexander & Baldwin’s businesses include transportation, real estate and agribusiness industries primarily in Hawaii. The company is based in Honolulu.

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