Franklin Street extends term loan by four years, amends covenants

By Marisa Wong

Morgantown, W.Va., July 27 – Franklin Street Properties Corp. amended its second amended and restated credit agreement dated Oct. 29, 2014 with Bank of America, NA as administrative agent to extend the maturity of the term loan to Sept. 27, 2021 from Sept. 27, 2017, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also modifies some financial covenants, including specified leverage ratios, and changes definitions of EBITDA, net operating income and other measures.

The company also amended its amended and restated credit agreement dated Oct. 29, 2014 with Bank of Montreal as administrative agent to conform the financial covenants to those under the updated Bank of America credit agreement.

The amendments were completed on July 21.

In connection with the amendment to the Bank of America facility, the company entered into interest rate swap transactions on July 22. The company executed trades in an aggregate notional amount of $400 million with various financial institutions.

The company entered into the swap transactions, which have an effective date of Sept. 27, 2017, in order to fix the base Libor interest rate on the Bank of America term loan during the extended period at 1.12%.

Based on the company’s credit rating as of June 30, the interest rate on the term loan when the extended period begins will then be 2.57%.

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

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