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CatchMark, CoBank Expand Credit Facilities to $410MM

December 29, 2014, 07:49 AM
Filed Under: Real Estate

CatchMark Timber Trust, Inc. announced the refinancing of its existing credit facilities through a syndicate led by CoBank ACB, increasing its total credit availability from $240 million to $410 million. The new debt facilities include a $35 million, five-year revolving line of credit, a $275 million seven-year multi-draw term loan, and a $100 million 10-year term loan. The refinancing provides additional capital for future acquisitions and other general corporate purposes, including share repurchases. The refinancing also provides CatchMark with increased liquidity and a reduction in its effective interest cost.

Transaction details include:

  • Additional acquisition capacity: CatchMark increased its debt availability for acquisitions under the multi-draw term loan by more than 150% to approximately $255 million. Expanding its holdings of well-stocked timberlands remains a key strategic initiative for increasing the company's sustainable harvest volumes and timber sales revenues.
  • Increased liquidity: The company's revolving credit facility has increased from $25 million to $35 million and will be available for small acquisitions under $5 million as well as general corporate purposes.
  • Lower effective interest rate: The Company is now eligible to receive annual patronage refunds, which are profit distributions made by CoBank and other Farm Credit System banks. The refinancing effectively reduces the company's annual cash interest expense by approximately 55 to 65 basis points or approximately $700,000 based on its current debt levels.
  • Risk management: To hedge against interest rate risk on the term loan, CatchMark entered into a hedging transaction for $35 million effectively fixing the rate at 4.145% before patronage.

Headquartered in Atlanta, CatchMark Timber Trust, Inc. is a self-administered and self-managed publicly traded REIT that began operations in 2007 and owns interests in approximately 397,100 acres* of timberland located in Alabama, Florida, Georgia, Louisiana and Texas.

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