Ares Industrial unit enters $1.55 billion two-part credit agreement

By Wendy Van Sickle

Columbus, Ohio, April 6 – Ares Industrial Real Estate Income Trust Inc. subsidiary Aireit Operating Partnership LP amended and restated its existing senior unsecured credit facility agreement on March 31 to provide for a three-year $1 billion revolver and a five-year $550 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

An accordion feature permits the credit facility to be increased to up to $2.3 billion.

The revolver has a sublimit for letters of credit equal to the lesser of 20% of the total credit facility commitments and $25 million and has two one-year extension options.

Revolver borrowings bear interest at SOFR plus a margin ranging from 125 basis points to 200 bps, depending on the company’s consolidated leverage ratio. There in an unused fee of either 15 bps or 20 bps per annum, depending on usage.

The term loan bears interest at SOFR plus a margin ranging from 120 bps to 190 bps, depending on the consolidated leverage ratio.

The $100 million of undisbursed portions of the term loan may be drawn in up to two advances, each in a minimum amount of $50 million, for up to six months. A ticking fee of 15 bps will apply to undrawn term loan amounts from June 30 through the end of the availability period.

Financial covenants include a consolidated leverage ratio; a consolidated fixed-charge coverage ratio; a consolidated tangible net worth; a secured indebtedness to total asset value; a secured recourse indebtedness to total asset value; and a minimum total asset value.

The credit facility replaces the company’s credit agreement dated Nov. 19, 2019.

Wells Fargo Bank, NA is the administrative agent.

Bank of America, NA is the syndication agent.

Wells Fargo Securities, LLC and BofA Securities, Inc. are the joint bookrunners.

Lead arrangers for the revolver include Wells Fargo, BofA, U.S. Bank, NA, Capital One, NA and Truist Securities, Inc.

Wells Fargo, BofA, Regions Capital Markets and PNC Bank, NA are the lead arrangers for the term loan.

Proceeds may be used for general business purposes, including debt refinancing, property acquisitions, new construction, renovations, expansions, tenant improvement, refinancing of existing lines, financing acquisition of permitted investments, and closing costs and equity investments primarily associated with commercial real estate property acquisitions or refinancings.

Ares Industrial Real Estate Income Trust, formerly known as Black Creek Industrial REIT IV Inc., is managed by Ares Management Corp., a Los Angeles-based asset management firm.

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