Realty Income refinances with $2.25 billion revolver and term loan

By Susanna Moon

Chicago, June 30 – Realty Income Corp. said it closed a $2.25 billion unsecured credit facility consisting of a $2 billion unsecured revolving credit facility and a $250 million five-year unsecured term loan.

The new facility replaces the company’s previous $1.5 billion unsecured credit facility, according to a company press release.

The revolver has an initial term of four years maturing in June 2019, plus two six-month extensions, and includes a $1 billion accordion expansion feature.

Interest on the revolver is Libor plus 90 basis points with a facility commitment fee of 15 basis points, for all-in drawn pricing of 105 bps over Libor versus all-in drawn pricing of 125 bps over Libor under the previous facility.

The new $250 million unsecured term loan matures in June 2020. Interest on the term loan is Libor plus 95 bps, based on the company’s credit rating. In conjunction with this term loan, the company said it also entered into an interest rate swap, which essentially fixes the rate at 2.67%.

Wells Fargo Bank is the joint lead arranger and administrative agent; Bank of America and Royal Bank of Canada are joint lead arrangers and co-syndication agents; Regions Bank is co-syndication agent; JPMorgan Chase Bank and U.S. Bank NA are co-documentation agents; and Bank of New York Mellon, Branch Banking and Trust Co., MUFG Union Bank, PNC Bank, Barclays Bank, Citibank, Credit Suisse, Goldman Sachs, Mizuho, Morgan Stanley, RBS Citizens Bank, UBS AG, Raymond James, Associated Bank and Comerica Bank also are lenders.

“We are pleased with the completion of our new and expanded credit facility, which reduces our borrowing costs and enhances our liquidity,” John P. Case, the company’s chief executive officer, said in the press release.

“Given the growth of our company and its increased activity, this additional financial flexibility will allow us to continue expanding our real estate portfolio while maintaining our commitment to a conservative balance sheet structure.”

Realty Income is a real estate investment trust for retail and commercial properties is based in Escondido, Calif.

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