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KeyBanc, Others Arrange $300MM Revolver for MedEquities Realty Trust

February 14, 2017, 08:00 AM
Filed Under: Real Estate

MedEquities Realty Trust, Inc. announced it has closed on a new $425 million secured credit facility.  The amended and restated credit agreement provides for a $300 million secured revolving credit facility and a $125 million secured term loan. The amended credit facility replaced a $300 million secured revolving credit facility, which was scheduled to mature in November 2017.

Amounts outstanding under the amended credit facility bear interest at LIBOR plus a margin between 1.75% and 3.00%, depending on the Company's leverage, for both the revolving credit facility and the term loan. The revolving credit facility matures in February 2021, with one 12-month extension option, and has an accordion feature that allows the total borrowing capacity under the credit facility to be increased to up to $700 million, including the ability to add and fund a second term loan. Both the accordion and the extension options are subject to certain conditions.  The term loan matures in February 2022. The Company has also entered into interest rate swap agreements on the full notional amount of the term loan.  The Company's forecasted all-in interest rate under the term loan is currently 3.59% and is comprised of the fixed 1.84% swap rate plus the margin under the credit facility. The new facility includes the ability to convert to an unsecured basis once minimum asset and borrowing base targets are achieved as well as certain other conditions.

Jeff Walraven, Executive Vice President and Chief Financial Officer of MedEquities, noted, "The new revolving credit facility and term loan provide substantial flexibility to our capital structure with significantly longer maturities, lower revolver borrowing costs, reduced exposure to fluctuations in short term interest rates and additional capacity to execute our acquisition plans."

At closing of the amended and restated credit agreement, the Company borrowed $31.5 million under the secured revolving credit facility and $125 million under the secured term loan to repay, in full, all outstanding amounts due under the prior facility. Based on the current borrowing base assets, the Company had approximately $101 million of available borrowing capacity under the revolving credit facility.

KeyBanc Capital Markets, JPMorgan Chase Bank and CitiGroup Global Markets served as co-lead arrangers and co-bookrunners. JPMorgan Chase Bank and CitiBank served as co-syndication agents. Capital One served as documentation agent. KeyBank National Association served as administrative agent. Other banks in the syndicate included Fifth Third Bank, Citizens Bank, Raymond James Bank, Royal Bank of Canada, Cadence Bank, Hancock Whitney Bank, Pinnacle Bank, CapStar Bank and Renasant Bank.

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