SL Green enters $3 billion term loan A, B, revolving credit facility

By Tali Rackner

Minneapolis, Nov. 27 – SL Green Realty Corp. and SL Green Operating Partnership, LP entered into a $3 billion restated credit facility on Nov. 21 with Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility refinances, extends and expands the company’s unsecured corporate credit facility by $217 million.

The facility includes an increased $1.3 billion term loan A facility, a new $200 million term loan B facility and a reduced $1.5 billion revolving credit facility.

The term loan A facility matures on March 31, 2023, extended from June 2019 and the term loan B facility matures on Nov. 21, 2024.

The revolver matures on March 31, 2022, extended from March 2019, and includes two six-month extension options, subject to certain conditions and an extension fee of 7.5 basis points for each extension.

There is also an up to $1.5 billion accordion option.

Interest is equal to Libor plus 90 bps to 175 bps for the term loan A, Libor plus 150 bps to 245 bps for the term loan B and Libor plus 82.5 bps to 155 bps for the revolver, all depending on the credit rating assigned to SL Green’s senior unsecured long-term debt.

The revolver also includes a commitment fee of 12.5 bps to 30 bps, also based on ratings.

At closing, the applicable spreads over Libor were 135 bps for the term loan A, 190 bps for the term loan B and 120 bps for the revolver.

Certain financial covenants require the company to maintain a maximum ratio of total debt to total asset value of 0.6 times, which may be increased to 0.65 times in certain circumstances;, a minimum ratio of EBITDA to fixed charges of 1.4 times, which will be increased to 1.75 times if a change of control occurs; a maximum ratio of secured debt to total asset value of 0.5 times; and a maximum ratio of unsecured debt to unencumbered asset value of 0.6 times, which may be increased to 0.65 times in certain circumstances.

For the term loan A and revolver, Wells Fargo Securities, LLC, JPMorgan Chase Bank, NA, Deutsche Bank Securities Inc. and U.S. Bank NA acted as joint lead arrangers and bookrunners, with Merrill Lynch, Pierce, Fenner & Smith Inc. and BMO Capital Markets Corp. as joint lead arrangers, JPMorgan as syndication agent, and Deutsche Bank, U.S. Bank, Bank of America, NA, and Bank of Montreal, as documentation agents.

For the term loan B, Wells Fargo Securities and U.S. Bank acted as joint lead arrangers and bookrunners, with U.S. Bank as syndication agent.

SL Green Realty is an Escondido, Calif.-based real estate investment trust for retail and commercial properties.

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