Franklin Street locks up $220 million seven-year term loan at 3.97%

By Susanna Moon

Chicago, Aug. 26 - Franklin Street Properties Corp. said it obtained a $220 million unsecured term loan due Aug. 26, 2020 with a group of banks with Bank of Montreal as administrative agent.

Interest will initially be Libor plus 165 basis points. The spread is based on the company's total leverage ratio and ranges from 145 bps to 220 bps.

The company elected to fix the base Libor rate at 2.32% per year for seven years by entering into an interest rate swap, according to a press release. The fixed Libor rate puts interest on the term loan at 3.97% as of Monday.

The term loan includes an accordion feature that allows for up to $50 million of additional borrowing capacity with lender commitments.

Proceeds will be used to help fund the company's pending acquisition of 1001 17th St., Denver, Colo., expected to close Wednesday.

PNC Bank, NA is syndication agent; Capital One, NA is documentation agent; and RBS Citizens, NA, TD Bank, NA, Regions Financial Corp. and BB&T Corp. are lenders.

"We proactively decided to close this $220 million seven-year unsecured term loan with a fixed rate to assist us in our continuing growth plans," George Carter, president and chief executive officer of Franklin Street Properties, said in the press release.

"With this unsecured term loan in place, as of Aug. 26, 100% of our total debt is unsecured, approximately 65% of our total debt is fixed and approximately 35% of our total debt is variable," Carter said.

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

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