Farmland Partners enters into $127 million 10-year loan agreement

By Tali Rackner

Norfolk, Va., March 31 – Farmland Partners Operating Partnership LP said five of its wholly owned subsidiaries entered into a 10-year loan agreement with Metropolitan Life Insurance Co. on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The agreement provides for a total of $127 million of term loans, comprised of a $90 million term loan, a $21 million term loan and a $16 million term loan.

The $90 million loan initially bears interest at Libor plus 238 basis points until June 29. The loan is payable in cash semiannually and accrues at a floating rate that will be adjusted quarterly to a rate per annum equal to the greater of: (a) three-month Libor plus 175 bps, which may be adjusted by MetLife on March 29, 2019, March 29, 2022 and March 29, 2025; and (b) 2%.

The $21 million term loan and $16 million term loan are payable in cash semiannually and accrue interest at an initial rate of 2.66% per annum. Interest may be adjusted by MetLife on March 29, 2019, March 29, 2022 and March 29, 2025.

The loan agreement contains a number of customary affirmative and negative covenants, including the requirement to maintain loan to value ratio of no greater than 60%. The guaranties also contain a number of customary affirmative and negative covenants.

Also on Tuesday, in connection with the loan agreement, the company terminated and repaid all amounts outstanding under the MSD bridge loan agreement, dated Feb. 29, 2016.

Farmland is an internally managed real estate company based in Denver.

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