Retail Opportunity refinances $175 million revolver, adds term loan

By Toni Weeks

San Diego, Sept. 21 - Retail Opportunity Investments, Corp. closed on the refinancing of its $175 million senior unsecured revolving credit facility and a $110 million senior unsecured term loan facility arranged with KeyBanc Capital Markets Inc. and Bank of America Merrill Lynch.

According to a press release, Retail Opportunity can extend the revolver, which is due Sept. 20, 2014, by one year. The term loan has a maturity date of Sept. 20, 2015.

Both facilities have the same Libor-based borrowing margin, which is initially priced off a grid tied to the company's leverage ratio. The initial interest rate will be Libor plus 175 basis points. If the company receives an investment-grade credit rating from at least two rating agencies, the borrowing margin will convert to a ratings-based grid.

Both facilities also have an accordion feature, which allows the company to increase the revolver to $300 million and the term loan to $175 million, subject to commitments and other conditions.

KeyBank NA is the administrative agent and letter of credit issuer, and Bank of America, NA is the syndication agent with PNC Bank, NA and U.S. Bank NA as co-documentation agents. Other participants include Bank of Montreal, Compass Bank, JPMorgan Chase Bank, NA, Royal Bank of Canada and Wells Fargo Bank, NA.

Proceeds from the term loan will be used to pay off debt under the company's existing credit facility.

Chief financial Officer John B. Roche commented in the press release: "The refinancing of our revolving credit facility and the closing of the term loan on an unsecured basis at spreads 75 bps inside our existing facility reflects our continued success in executing the company's business plan and our commitments to a conservative and flexible capital structure."

According to Roche, debt to total assets was 13.3% as of June 30, leaving 88% of the company's portfolio unencumbered.

The Purchase, N.Y.-based REIT acquires, owns, leases, repositions and manages a diverse portfolio of necessity-based retail properties, including community and neighborhood shopping centers that are anchored by national or regional supermarkets and drugstores.

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