Ramco-Gershenson obtains $75 million term loan via Capital One

By Toni Weeks

San Luis Obispo, Calif., May 19 - Ramco-Gershenson Properties Trust said it obtained a $75 million senior unsecured term loan facility with Capital One, NA, according to a press release.

The seven-year facility has a $75 million accordion feature and is prepayable without penalty.

Borrowings bear interest initially at Libor plus 170 basis points. The margin may range from 125 bps to 225 bps based on the company's leverage or credit ratings. According to the release, interest expenses will be hedged with an existing interest rate swap expiring in April 2016, resulting in an effective fixed initial annual rate of 2.9%.

Proceeds of the term loan, along with proceeds from a $100 million issue of senior unsecured notes, will be used to repay existing debt with shorter-term maturities, including $45 million of variable-rate debt outstanding under an unsecured revolving line of credit, $45 million of variable-rate bank term debt due 2017 and $75 million of bank term debt due in 2017. Proceeds will also be used for general corporate purposes.

Settlement of the term loan is expected by the end of this month.

Upon closing of both financings and the repayment of existing debt, the company's balance sheet will feature a weighted averaged term to maturity of about 6.6 years, up from 5.1 years; debt maturities with no more than 16% of total debt maturing in any single year; unencumbered operating assets to unsecured debt coverage of 3.2 times; over 95% of total debt at fixed rates or swapped to fixed rates; and over $232 million of borrowing availability under the company's $240 million unsecured revolving line of credit.

Ramco-Gershenson is a real estate investment trust based in Farmington Hills, Mich. Its primary business is the ownership and management of shopping centers.

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