Realty Income has closed on an amended $3.25 billion credit facility. The amended credit facility is comprised of a $3 billion revolving credit facility that replaces the company’s existing $2.0 billion credit facility, and a new $250 million term loan due March 2024.
The company’s existing $250 million unsecured term loan due June 2020 will remain outstanding under the amended credit agreement.
The capacity of the revolving credit facility can be increased to $4 billion with the accordion expansion feature. The revolving credit facility matures in March 2023 and includes two six-month extensions that can be exercised at the company’s option. Under the revolving credit facility, the company’s current A-/A3 credit ratings provide for a borrowing rate of LIBOR (London Interbank Offered Rate) plus 77.5 basis points with a facility commitment fee of 12.5 basis points, for all-in drawn pricing of 90 basis points over LIBOR. This compares to all-in drawn pricing of 97.5 basis points over LIBOR under the previous facility.
Borrowings under the new $250 million term loan due March 2024 bears interest at LIBOR plus 85 basis points, based on our current credit rating. In conjunction with this term loan, we also entered into an interest rate swap which essentially fixes our per annum interest rate on the term loan at 3.89%.
A total of 23 lenders are participating in the credit facility, including Wells Fargo Bank as the administrative agent. Wells Fargo Securities, Merrill Lynch, RBC Capital Markets, JPMorgan Chase Bank and Regions Bank are serving as joint-lead arrangers for the revolving credit facility. Bank of America, Royal Bank of Canada, JPMorgan Chase Bank and Regions Bank are serving as co-syndication agents for the revolving credit facility. Barclays Bank, Goldman Sachs Bank USA, Mizuho Bank, Morgan Stanley Bank, and U.S. are serving as co-documentation Agents for the revolving credit facility.
Wells Fargo Securities, Regions Bank, U.S. Bank, The Bank of New York Mellon, BB&T and PNC Capital Markets are serving as joint-lead arrangers for the new $250 million term loan. Regions Bank, U.S. Bank, The Bank of New York Mellon, BB&T and PNC Bank are serving as co-syndication agents for the new $250 million term loan.
Other participants in the new credit facility include The Bank of Nova Scotia, BMO Harris Bank, Citibank, Citizens Bank, Credit Suisse, Cayman Islands Branch, TD Bank, MUFG Union Bank, UBS, Stamford Branch, Associated Bank and Comerica Bank.
“We are pleased with the completion of our expanded credit facility which reduces our borrowing costs and further enhances our liquidity,” said Sumit Roy, president and CEO of Realty Income. “Given the growth of our company, this additional financial flexibility will allow us to continue expanding our real estate portfolio while maintaining our commitment to a conservative balance sheet structure.”
Realty Income is an S&P 500 company dedicated to providing shareholders with dependable monthly income.