First Potomac Realty Investment amends covenants of term loan

By Angela McDaniels

Tacoma, Wash., Oct. 6 - First Potomac Realty Trust's operating partnership, First Potomac Realty Investment LP, amended its secured term loan last Friday, according to an 8-K filing with the Securities and Exchange Commission.

Under the terms of the amendment, the operating partnership must satisfy the following financial covenants:

• Total debt cannot exceed 62.5% of gross asset value. This will step down to 60% on Dec. 31;

• The consolidated debt yield must be at least 10½%. This will increase to 11% on Dec. 31;

• The fixed charge coverage ratio must be at least 1.5 to 1.0;

• Tangible net worth must be at least $690.29 million plus (i) 80% of the net proceeds of any future equity issuances of the company and (ii) 80% of the value of partnership units of the operating partnership issued in connection with any future asset or stock acquisitions;

• Consolidated borrowing base debt cannot exceed 65% of the value of the eligible borrowing base properties. This will step down to 62.5% on March 31 and to 60% on March 31, 2013; and

• The borrowing base pool debt service coverage ratio must be at least 1.45 to 1.00. This will increase to 1.5 to 1.0 on March 31 and to 1.55 to 1.00 on March 31, 2013.

These changes substantially conform to the covenants required under the operating partnership's revolving credit facility.

In addition, the term loan must be guaranteed on a senior basis by all of the operating partnership's other subsidiaries that currently guarantee its revolver, unsecured term loan and senior notes.

KeyBank NA is the administrative agent.

First Potomac is a real estate investment trust that invests in industrial properties in the Washington, D.C., area. It is based in Bethesda, Md.

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