Rexford Industrial Realty gets up to $150 million unsecured term loan

By Sarah Lizee

Olympia, Wash., May 25 – Rexford Industrial Realty, Inc. and Rexford Industrial Realty, LP entered into a credit agreement with Capital One, NA as administrative agent on Tuesday providing for an up to $150 million senior unsecured term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

Under the agreement, Rexford may add one or more incremental term loans totaling up to $100 million.

The credit agreement matures on May 22, 2025.

Borrowings bear interest at Libor plus a margin that ranges from 150 basis points to 220 bps per annum, depending on the company’s leverage ratio. Interest is initially Libor plus 150 bps.

If either company obtains one additional investment-grade rating from one or more of Standard & Poor's or Moody's Investors Service to complement its investment-grade rating from Fitch Ratings, and elects to use the alternative rate based the debt rating, the margin over Libor will range from 140 bps to 235 bps per annum.

The borrower may voluntarily prepay loans under the credit agreement in whole or in part at any time, subject to some notice requirements. To the extent that Rexford prepays all or any portion of a loan prior to May 22, 2020, the company will pay a prepayment premium equal to 2% if the prepayment occurs prior to May 22, 2019, and 1% if the prepayment occurs after then.

Amounts borrowed under the credit agreement and repaid or prepaid may not be reborrowed.

Covenants include a ratio of total debt to total asset value of not more than 60%, a ratio of total secured debt to total asset value of not more than 45% and a ratio of total secured recourse debt to total asset value of not more than 15%.

Rexford is also required to maintain a minimum tangible net worth of at least the sum of $760,740,750 and an amount equal to 75% of the net equity proceeds received by the company after Sept. 30, 2016.

The company must maintain a ratio of adjusted EBITDA to fixed charges of at least 1.5 to 1, a ratio of total unsecured debt to total unencumbered asset value of not more than 60% and a ratio of unencumbered net operating income to unsecured interest expense of at least 1.75 to 1.

The entire amount of the term loan was borrowed at closing on Tuesday.

The proceeds will be used to partially pay down the outstanding balance under its unsecured revolving credit facility, to fund acquisitions and for general corporate purposes.

Capital One is the lead arranger and bookrunner. BB&T Capital Markets is the syndication agent.

Rexford is a Los Angeles-based real estate investment trust focused on industrial properties in southern California.

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