ERP Operating enters $2.5 billion five-year replacement revolver

By Marisa Wong

Los Angeles, Oct. 27 – ERP Operating LP, the operating partnership of Equity Residential, entered into a new $2.5 billion unsecured revolving credit agreement on Oct. 26 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The new credit facility replaces the operating partnership’s existing $2.5 billion revolver scheduled to mature on Nov. 1, 2024.

The new credit facility matures on Oct. 26, 2027, subject to extension for additional one- or two-year periods.

The operating partnership has the ability to increase available borrowings by an additional $750 million by adding lenders to the facility, asking existing lenders to increase their commitments or incurring one or more term loans.

The interest rate on advances under the revolver will generally be term SOFR or daily SOFR (including a 10 basis point spread adjustment in each case) plus a spread, which is currently 72.5 bps. The spread generally ranges from 70 bps to 140 bps.

In addition, there is a facility fee, which is currently 12.5 bps. The fee generally ranges from 10 bps to 30 bps.

Both the spread and the facility fee are dependent on the credit rating of the operating partnership’s long-term debt.

The credit agreement also contains a sustainability-linked pricing component, which provides for interest rate margin reductions upon achieving certain sustainability ratings.

JPMorgan Chase Bank, NA, Wells Fargo Securities, LLC and BofA Securities, Inc. are joint bookrunners.

JPMorgan, Wells Fargo Securities, BofA Securities, Barclays Bank plc, Citigroup Global Markets Inc., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, U.S. Bank NA and Deutsche Bank Securities, Inc. are joint lead arrangers.

JPMorgan, Wells Fargo Bank, NA, Barclays Bank, Citigroup, Morgan Stanley, RBC, U.S. Bank and Deutsche Bank are co-syndication agents.

Bank of China, Chicago Branch, Bank of Nova Scotia, PNC Bank, NA, Regions Bank, Truist Bank, Mizuho Bank, Ltd. and TD Bank, NA are co-documentation agents.

Bank of Montreal and Bank of New York Mellon are senior managing agents.

J.P. Morgan Securities LLC is the sustainability structuring agent.

The real estate investment trust is based in Chicago.

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