Fibra Macquarie gets $425 million facility, eyes $75 million loan

By Angela McDaniels

Tacoma, Wash., April 2 – Fibra Macquarie Mexico signed an agreement for a $425 million unsecured credit facility and a term sheet for a new $75 million 15-year secured term loan, according to a company news release.

The unsecured credit facility is comprised of a $180 million non-amortizing five-year term loan and a $245 million equivalent five-year revolving credit facility that is available for general corporate purposes, including asset investments.

The revolver is comprised of a $180 million dollar-denominated tranche and a Ps. 1.26 billion (equivalent to $65 million) Mexican peso-denominated tranche.

The interest rate is Libor plus 250 basis points for the unsecured term loan, representing a 62.5 bps compression from an existing unsecured term loan being repaid. The company also entered into interest rate swaps to fix the floating-rate Libor component for the duration of the unsecured term loan.

The dollar and Mexican peso revolving tranches will bear interest at Libor plus 250 bps and Mexican TIIE plus 225 bps, respectively.

The new revolver represents a credit spread compression of 62.5 bps for the dollar tranche and 25 bps for the Mexican peso tranche when compared to a revolver being replaced.

The company said the new unsecured credit facility provides for more favorable loan covenants and increased financial flexibility compared to the existing credit facility.

Secured term loan

The company executed a term sheet with an insurer for the secured term loan.

The all-in fixed rate for the secured term loan is 5.23%, which is below the company’s current weighted average cost of debt.

This secured term loan would represent the longest-dated financing that the company has accessed to date, according to the news release.

The secured term loan is subject to the completion of loan documentation and the lender’s final internal approval.

Refinancing

Drawings of $180 million under the five-year term loan, together with $75 million drawn under the revolver and $3 million cash on hand, will be used to prepay the existing $258 million unsecured term loan that was due to expire on June 30, 2020. A subsequent borrowing of $75 million under the secured term loan is expected to be used to repay the drawn revolver.

The company said the refinancing is debt neutral and enhances its debt profile by diversifying its lender base and significantly extending the weighted average maturity of its debt.

Completion of the refinancing is expected to take place in two phases during the second quarter of 2019. The unsecured credit facility is expected to close in full on or around Friday, while the secured term loan is expected to close before the end of June.

“This $500 million refinancing transaction has been timed to take advantage of recent declines in interest rates and further de-risks Fibra Macquarie’s debt maturity profile,” chief financial officer Simon Hanna said in the news release.

“Upon completion of the refinancing, our next debt maturity will not be until FY2023, while our overall weighted average debt tenor will be ... approximately 6.7 years.”

The refinancing follows the full repayment on Jan. 31 of a secured loan at the company’s joint venture level, using cash on hand. The company’s 50% pro rata share of the loan repayment totaled Ps. 284.1 million.

The peso-denominated loan carried a fixed rate of 7.61% and was scheduled to mature on April 1, 2019.

Fibra Macquarie Mexico is a Mexico City-based real estate investment trust targeting industrial, retail and office real estate opportunities.

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