Washington REIT enters into $600 million replacement revolver

By Marisa Wong

Madison, Wis., June 23 – Washington Real Estate Investment Trust entered into a credit agreement on June 23 for aggregate revolving loan commitments of $600 million, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Securities, LLC and Keybanc Capital Markets Inc. are the joint lead arrangers and joint bookrunners with Wells Fargo Bank, NA as administrative agent, KeyBank NA as syndication agent and Royal Bank of Canada and SunTrust Bank as documentation agents.

The credit agreement will replace the borrowing capacity under Washington REIT’s amended and restated credit agreement dated May 17, 2012 with Wells Fargo Bank as administrative agent, which provided for aggregate revolving loan commitments of $400 million.

The credit agreement will also replace the borrowing capacity under the trust’s amended and restated credit agreement dated June 25, 2012 with SunTrust Bank as administrative agent, which provided for aggregate revolving loan commitments of $100 million.

In connection with the new credit agreement, Washington REIT prepaid the prior Wells Fargo facility and terminated both existing facilities. The SunTrust facility had no outstanding borrowings.

The new credit agreement includes the option to increase the revolving commitments or add term loans to up to $1 billion total.

The facility will mature on June 22, 2019, subject to two six-month extension options. The exercise of each extension option requires payment of a fee of 7.5 basis points on the extended revolving commitments.

The credit agreement allows Washington REIT to obtain up to $60 million of letters of credit.

As of Tuesday, revolving loans totaling about $185 million were outstanding under the facility.

Borrowings will bear interest at Libor plus a margin ranging from 87.5 bps to 155 bps, depending on the trust’s credit rating. In addition, there is a facility fee of 12.5 bps to 30 bps, also based on the credit rating.

The credit agreement requires that Washington REIT satisfy some financial maintenance covenants, including a ratio of total debt to total asset value of not more than 0.60 to 1.00; a ratio of adjusted EBITDA to fixed charges of not less than 1.50 to 1.00; a ratio of secured indebtedness to total asset value of not more than 0.40 to 1.00; a ratio of net operating income from unencumbered properties satisfying certain criteria to interest expense on unsecured debt of not less than 1.75 to 1.00; and a ratio of unsecured debt to the unencumbered pool value of properties satisfying certain criteria of not more than 0.60 to 1.00.

Washington is a REIT that invests in the greater Washington, D.C., metro region and is based in Rockville, Md.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.