Slate Retail REIT (TSX: SRT.U) (TSX: SRT.UN) (the “REIT”), an owner and operator of U.S. grocery-anchored real estate, announced it has completed the refinancing of a $525 million revolving credit facility and term loan. The REIT has also reduced pricing for its $250 million term loan and entered into a commitment for an $83 million 10-year mortgage.
“By securing attractive debt for our portfolio, we significantly extend term, provide interest rate savings and achieve continued flexibility in our management of the balance sheet,” said David Dunn, the REIT’s Chief Operating Officer, who was previously named as the REIT’s next Chief Executive Officer effective March 12, 2020. “We appreciate our debt capital partners and are pleased that the strong demand and terms we received reflect the portfolio’s size and quality.”
“Extending Slate Retail’s debt maturity at a reduced cost positions us to capitalize on a robust pipeline of acquisition opportunities for high-quality, grocery-anchored centres across the United States, which are below replacement cost,” said Andrew Agatep, the REIT’s Chief Financial Officer.
Overall Impact
- Achieves $858 million in total debt refinancing.
- Secures annualized interest savings of $1.7 million or $0.04 per class U equivalent unit.
- Extends weighted average debt maturity to 4.8 years.
- After closing the $83 million mortgage, the REIT expects to have approximately $212 million of borrowing capacity on its revolving credit facility.
- Supports the REIT’s growth initiatives through improved covenant packages.
$525 Million Revolving Credit Facility and Term Loan
- Refinanced the REIT’s existing revolving credit facility and term loan for four- and five-year terms, respectively, for an aggregate of $525 million.
- Revolving credit facility has two six-month extensions at the REIT’s option.
- Reduced pricing on the revolving credit facility and term loan by 15 and 25 basis points, respectively.
- Received significant demand from the lender syndicate exceeding the REIT’s required amount.
$250 Million Term Loan Amendment
- Reduced pricing on the REIT’s $250 million term loan, due in 2023, by 25 basis points.
- Enhanced the existing covenant package to align with the REIT’s refinanced revolving credit facility and term loan.
$83 Million Mortgage
- Entered into a commitment for an $83 million mortgage loan at 3.48%, subject to customary closing conditions.
- 10-year term with a 30-year amortization.
- Secured by a pool of eight properties and is non-recourse to the REIT.
- The REIT expects to close this mortgage in the first quarter of 2020.
- Proceeds will be used to reduce borrowings on the REIT’s revolving credit facility.
About Slate Retail REIT (TSX: SRT.U / SRT.UN)
Slate Retail REIT is a real estate investment trust focused on U.S. grocery-anchored real estate. The REIT owns and operates approximately U.S. $1.3 billion of assets located across the top 50 U.S. metro markets that are visited regularly by consumers for their everyday needs. The REIT’s diversified portfolio and quality tenant covenants provide a strong basis to continue to grow unitholder distributions and the flexibility to capitalize on opportunities that drive value appreciation. Visit slateretailreit.com to learn more about the REIT.
About Slate Asset Management
Slate Asset Management is a leading real estate focused alternative investment platform with over $6 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm’s careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.
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