Franklin Street closes on $900 million unsecured credit facility

By Jennifer Chiou

New York, Sept. 27 - Franklin Street Properties Corp. and certain of its wholly owned subsidiaries entered into an amended and restated credit agreement providing for a $500 million revolving line of credit and a $400 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA acted as administrative agent, letter of credit issuer and swingline lender for the unsecured credit facility.

Participating banks include RBS Citizens, NA, Regions Bank and Bank of Montreal as syndication agents; BBVA Compass and PNC Bank, NA as documentation agents; along with U.S. Bank NA, Capital One, NA, TD Bank, NA and Branch Banking and Trust Co. as lenders.

On Thursday, Franklin Street drew down the full amount under the term loan as well as $82 million under the revolver.

The filing noted that the company's $600 million revolver that was scheduled to mature on Feb. 22, 2014 was amended and restated in its entirety by the credit agreement, and the $482 million under that facility was repaid from the proceeds of the new facility.

The term loan comes due on Sept. 27, 2017. The revolver has an initial maturity of Sept. 27, 2016.

Franklin added that the revolver has an up to $250 million accordion feature.

Depending on leverage, borrowings will bear interest at Libor plus a margin of 135 basis points to 190 bps. The facility fee will range from 20 bps to 40 bps.

Although the interest rate is variable under the credit agreement, the company is permitted to fix the base Libor interest rate on the term loan by entering into an interest rate swap agreement. On Sept. 27, Franklin entered into an ISDA master agreement with Bank of America that fixes the base Libor interest rate on the term loan at 0.75% per annum for five years.

Based upon the company's current leverage ratio, the interest rate on the revolver was 1.67% per year, and the rate on the term loan was 2.20% per year.

"We proactively decided to increase the size of our credit facility from $600 million to $900 million with an additional $250 million accordion feature to assist us in our continuing growth plans," president and chief executive officer George Carter said in a news release.

Based in Wakefield, Mass., Franklin is focused on investments in commercial properties.

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