Retail Properties gets $200 million delayed-draw term loan due 2023

By Angela McDaniels

Tacoma, Wash., Nov. 29 – Retail Properties of America, Inc. entered into a $200 million delayed-draw senior term loan due Nov. 22, 2023, according to an 8-K filing with the Securities and Exchange Commission.

The company did not draw on the term loan at closing on Nov. 22. The delayed-draw period ends on May 22.

The company expects to use the term loan for acquisition, development and redevelopment projects and related tenant improvements, capital expenditures and leasing commissions; bridge debt financing for acquisitions; debt repayment and working capital purposes.

The term loan has a $100 million accordion feature.

The interest rate is Libor plus a margin ranging from 170 basis points to 255 bps based on the company’s leverage ratio.

At any time after the issuer has received an investment-grade rating from either Moody’s Investors Service or S&P, it may elect to have the margin determined based on its credit rating. Once it makes that election, the margin will range from 150 bps to 245 bps.

The company may prepay the term loan prior to Nov. 22, 2018, subject to a prepayment fee of 2% of any amount prepaid on or before May 22, 2017, 1.5% of any amount prepaid after May 22, 2017 but on or before Nov. 22, 2017 and 1% of any amount prepaid after Nov. 22, 2017 but on or prior to Nov. 22, 2018. Subsequent to Nov. 22, 2018, there is no prepayment fee.

Capital One, NA, PNC Capital Markets LLC, TD Bank, NA and Regions Bank are the joint lead arrangers and joint book managers. TD Bank is the syndication agent. PNC and Regions Bank are the co-documentation agents. Capital One is the administrative agent.

The term loan agreement contains financial covenants that require the company to maintain a maximum leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum unencumbered interest coverage ratio and a maximum secured debt ratio.

The company is an Oak Brook, Ill.-based real estate investment trust.

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