Franklin Street closes amended $900 million revolver and term loan

By Susanna Moon

Chicago, Oct. 29 – Franklin Street Properties Corp. obtained an amended $500 million revolving line of credit and a $400 million term loan on Wednesday with BofA Merrill Lynch as the bookrunner and lead arranger, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent. Citizens Bank, NA, Regions Bank and Bank of Montreal are the syndication agents. Compass Bank and PNC Bank, NA are the documentation agents.

At closing, there were borrowings of $285 million outstanding under the revolver, and the company drew down the entire $400 million under the term loan on Sept. 27, 2012.

The term loan will continue the existing five-year term that matures on Sept. 27, 2017.

Borrowings under the revolver may be borrowed, repaid and reborrowed until the initial maturity at Oct. 29, 2018, which was extended from Sept. 27, 2016, the previous maturity date.

The company may extend the initial maturity of the revolver by an additional 12 months or until Oct. 29, 2019.

The revolver continues to include an accordion feature for up to $250 million of additional borrowing with lender commitments.

Interest on the revolving loans initially is Libor plus 125 basis points. The margin over Libor ranges from 87.5 bps to 165 bps based on the company’s credit ratings. The fee is initially 25 bps, with the spread ranging from 12.5 bps to 30 bps.

Interest on the term loan is initially Libor plus 145 bps. The margin over Libor ranges from 95 bps to 190 bps.

On Sept. 27, 2012, the company entered into an agreement with Bank of America, NA that fixed the base Libor interest rate on the term loan at 0.75% per year for five years until the Sept. 27, 2017 maturity date.

Accordingly, based on the company’s credit rating, the effective interest rate on the revolver was 1.6% per year and the interest rate on the term loan was 2.2% per year.

Bank of Montreal term loan

The company also entered into an amended credit agreement on Wednesday for a $220 million unsecured term loan with BMO Capital Markets and PNC Bank, NA as the joint bookrunners and joint lead arrangers.

Bank of Montreal is the administrative agent; PNC Bank, NA is the syndication agent; and Capital One, NA is the documentation agent.

On Aug. 26, 2013, the company drew down the entire $220 million under the term loan, which remains fully advanced and outstanding under the credit agreement.

The term loan continues to have a seven-year term that matures on Aug. 26, 2020 and continues to include an accordion for up to $50 million of additional loans with lender commitments.

Interest on the loans is initially Libor plus 165 bps. The margin over Libor ranges from 105 bps to 215 bps.

On Aug. 26, 2013, the company entered into an agreement with Bank of Montreal that fixed the base Libor interest rate at 2.32% per year for seven years until the Aug. 26, 2020 maturity date.

As of Wednesday, the effective interest rate was 3.97% per year.

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

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