CBL Properties announced that it had closed on a new $1.185 billion senior secured facility, which includes a fully-funded $500 million term loan and a revolving line of credit with total borrowing capacity of $685 million.
“We are pleased to close the new bank facility, which has been a top priority for us,” said Stephen Lebovitz, chief executive officer. “This successful transaction underscores the confidence that the lending community and our bank group have in CBL and our business. We appreciate their partnership and strong support as we execute our strategy and position CBL for a strong future.”
The new facility matures in July 2023 and bears a floating interest rate of 225 basis points over LIBOR. The $500 million Term Loan balance will be reduced by $35 million per year, paid in quarterly installments. The facility replaces all of the company’s prior unsecured bank facilities, which totaled $1.795 billion including three unsecured term loans totaling $695 million and three unsecured revolving lines of credit with aggregate capacity of $1.1 billion (October 2020 maturity). At closing, the company utilized its new line of credit to reduce the principal amount of term loans by $195 million. After this utilization, the new line of credit had an outstanding balance of $419.8 million.
“We have accomplished a number of important goals with this closing,” said Farzana Khaleel, executive vice president - chief financial officer. “First, we have removed near-term financing risk, with no unsecured debt maturities until December 2023. This significant lengthening of our maturity schedule provides us with a clear runway to execute our business plan of redeveloping former department stores and transforming our properties into suburban town centers. Second, we have meaningfully enhanced our liquidity and financial flexibility, particularly when coupled with the increased free cash flow created through our dividend adjustment. Finally, the new facility is simplified and right-sized, removing inflexible covenants and reducing the cost expended for unused and unneeded excess capacity.”
She added, “We were deliberate in selecting properties to secure the new facility to ensure the remaining unencumbered portfolio provides strong and stable cash flows as well as significant value to support the covenants for our senior unsecured notes.”
The facility contains customary provisions upon which the collateral may be released. The agreement for the Facility also contains certain financial covenants. These covenants are defined and computed on the same basis as the covenants required under the Company’s senior unsecured notes.
Wells Fargo Bank, National Association served as Administrative Agent. Wells Fargo Securities, LLC, U.S. Bank National Association, PNC Capital Markets LLC, Citizens Bank, N.A., JPMorgan Chase Bank, N.A. and Regions Capital Markets served as joint lead arrangers.