Daily News: July 26, 2017

KeyBank Agents $100MM Jernigan Capital Facility


Jernigan Capital entered into an agreement for a $100 million secured revolving credit facility with a syndicate of banks led by KeyBank and Raymond James Bank.

The credit facility, which has an accordion feature permitting expansion up to $200 million, will provide lower cost debt financing for the company’s pipeline of self-storage development investments. The credit agreement has a three-year term that expires July 24, 2020.

KeyBanc Capital Markets and Raymond James Bank acted as joint lead arrangers for the credit facility. KeyBank acted as the administrative agent for the credit facility and Raymond James Bank acted as syndication agent. Other banks participating in the credit facility are Trustmark National Bank, FirstBank, Triumph Bank and Renasant Bank.

Advances under the credit agreement bear interest at rates between 275 and 375 basis points over 30-day LIBOR. At such time as the company has borrowings equaling or exceeding $50 million, it is required by the credit agreement to hedge at least 75% of its floating rate borrowings.

The company intends to enter into a swap or cap agreement to fix its LIBOR-based borrowings under the credit facility when borrowings under the credit facility reach $50 million.

“With the procurement of up to $100 million of new committed capital we are positioned to fund our robust pipeline of well-located state-of-the-art self-storage development investments,” commented President and COO John Good. “This credit facility is expected to provide the ability to better match fund our development pipeline at a lower-cost, allowing us to efficiently manage our capital in a manner that we believe continues to enhance shareholder value.”

In connection with closing the credit facility, the company repurchased the senior participations on five self-storage development loans it had sold in mid-2016 and plans to utilize proceeds from its recently completed follow-on public offering to pay down the credit facility to eliminate approximately $200,000 per quarter of interest expense on those senior participations.