Sila Realty Trust enters $800 million replacement revolver, term loan

By Marisa Wong

Los Angeles, Feb. 22 – Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP and some of the company’s subsidiaries entered into a senior unsecured revolving credit agreement on Feb. 15 for aggregate commitments of $500 million, according to an 8-K filing with the Securities and Exchange Commission.

Truist Bank is administrative agent, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, NA and Wells Fargo Securities LLC are co-syndication agents, joint lead arrangers and joint bookrunners.

Commitments may be increased, subject to lender approval, through incremental term loans or revolving loan commitments in an aggregate amount of up to $1 billion.

The maturity date for the revolver is Feb. 15, 2026 but may be extended for a period of six months on no more than two occasions, subject to payment of an extension fee.

The revolver replaces the company’s prior $500 million revolving line of credit set to mature on April 27, 2022, with one 12-month extension option. The company did not exercise this extension option.

At closing of the new revolver, the company extinguished all commitments associated with the prior revolver and closed that loan in its entirety.

Simultaneously with execution of the new revolving credit agreement, the company entered into a senior unsecured term loan agreement on Feb. 15 with Truist Bank as administrative agent and Truist Securities, BMO Capital Markets, Capital One and Wells Fargo Securities as joint lead arrangers and joint bookrunners.

The term loan, which was fully funded at closing, is made up of aggregate commitments of up to $300 million.

Term loan commitments may be increased, subject to lender approval, to an aggregate amount of up to $600 million.

The term loan has a maturity date of Dec. 31, 2024 and may be extended for a period of six months on no more than two occasions, subject to payment of an extension fee.

The term loan replaces the company’s prior term loan, which was paid off in its entirety upon closing of the new revolver and new term loan.

Lender commitments to the new loans were oversubscribed. The revolver and term loan are pari passu and have aggregate commitments available of $800 million.

Borrowings are guaranteed by the operating partnership and some other subsidiaries of Sila.

The company may prepay the loans at any time.

Loans bear interest at SOFR plus a margin based on a total leverage ratio, ranging from 125 basis points to 190 bps.

In addition, the company is required to pay a per annum fee on the unused portion of the revolver of 20 bps if the average daily amount outstanding is less than 50% of the aggregate commitments or 15 bps if the average daily amount outstanding is equal to or greater than 50% of the aggregate commitments. The unused fee is payable quarterly in arrears.

The credit facility contains covenants relating to, among other things, a maximum consolidated leverage ratio, maximum secured leverage ratio, fixed-charge coverage ratio, minimum consolidated tangible net worth and maximum distribution/payout ratio.

Proceeds may be used to finance the purchase of properties, for tenant improvements and leasing commissions with respect to real estate, for repayment of indebtedness, for capital expenditures with respect to real estate and for general corporate and working capital purposes.

The real estate investment trust company is based in Tampa, Fla.

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