Independence Realty restates credit agreement to lift, extend revolver

By Marisa Wong

Los Angeles, Dec. 14 – Independence Realty Operating Partnership, LP, the limited partnership through which Independence Realty Trust, Inc. owns its assets and conducts its operations, entered into a third amended, restated and consolidated credit agreement on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends, restates and consolidates unsecured revolving credit and term loan credit facilities originated under prior credit agreements primarily to increase the borrowing capacity under the company’s existing unsecured revolving credit facility to $500 million from $350 million and to extend the maturity date of the revolver to Jan. 31, 2026 from May 9, 2023.

The prior credit agreements are the company’s second amended and restated credit agreement dated May 18, 2021, term loan agreement dated Oct. 30, 2018 and term loan agreement dated Nov. 20, 2017.

The restated credit agreement does retain, without material change, the company’s three outstanding unsecured term loans in the aggregate amount of $500 million. The three term loans consist of a $200 million term loan that matures on May 18, 2026, a $200 million term loan due Jan. 17, 2024 and a $100 million term loan due Nov. 20, 2024.

Borrowings under the revolver will be available for general corporate purposes.

Up to 10% of borrowing availability under the revolver is available for swingline loans, and up to 10% is available for the issuance of letters of credit.

The borrower has the right to request an increase in the aggregate amount of the restated credit agreement to up to $1.5 billion from $1 billion. The increase may be allocated to the revolver or one or more of the term loans.

The company may prepay the amounts outstanding under the restated credit agreement, in whole or in part, at any time without fee or penalty, except for breakage costs associated with Libor borrowings.

Borrowings under the revolver bear interest at Libor plus a margin of 125 basis points to 200 bps. The term loans bear interest at Libor plus a margin of 120 bps to 190 bps. The applicable margin will be determined based upon the company’s consolidated leverage ratio.

At the time of closing, the applicable margin was 125 bps for the revolver and 120 bps for the term loan.

The revolver requires monthly payments of interest only but requires mandatory prepayments in some cases.

In addition, the restated credit agreement contains financial covenants applicable to the borrower group involving maximum consolidated total debt to total asset value, maximum permitted investments, minimum consolidated tangible net worth, maximum secured debt to total asset value, maximum unsecured debt to eligible unencumbered properties, minimum unsecured interest coverage and minimum consolidated fixed-charge coverage.

Independence Realty Trust is parent guarantor.

KeyBank NA is administrative agent.

Citibank, NA and Huntington National Bank are revolver co-syndication agents; Regions Bank and Capital One, NA are 2021 term loan co-syndication agents; and Bank of America, NA, Capital One, Citizens Bank, NA, PNC Bank, NA, Regions Bank, BMO Harris Bank, NA, Huntington National Bank and Truist Bank are co-documentation agents.

Citibank and KeyBanc Capital Markets are revolver joint bookrunners; KeyBanc Capital Markets, Citibank and Huntington National Bank are revolver joint lead arrangers; and KeyBanc Capital Markets, Capital One and Regions Capital Markets are 2021 term loan joint lead arrangers.

Capital One and Huntington National Bank are 2017 term loan co-syndication agents; and KeyBanc Capital Markets, Capital One and Huntington National Bank are 2017 term loan joint bookrunners and joint lead arrangers.

Citibank is 2018 term loan syndication agent; Citibank and KeyBanc Capital Markets are 2018 term loan joint bookrunners and joint lead arrangers.

Independence Realty is a Philadelphia-based real estate investment trust that owns apartment properties.

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