Post Apartment extends term loan, syndicated line, cash management line

By Marisa Wong

Madison, Wis., Feb. 2 – Post Apartment Homes, LP extended the term of its $300 million unsecured loan to January 2020 from January 2018, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into a first amendment to its term loan agreement with Wells Fargo Bank, NA as administrative agent on Jan. 28.

The interest rate for the amended term loan is Libor plus 115 basis points. The interest rate is based on the credit ratings of the operating partnership’s senior unsecured debt. The Libor spread ranges from 90 bps to 185 bps.

Among other things, the term loan amendment also reduces the capitalization rate to 6% from 6.5% for the purpose of valuing gross asset value for the financial covenant calculations; eliminates previous prepayment penalties; releases some subsidiaries from the requirement to guarantee the term loan; amends the financial covenants by removing covenants relating to tangible net worth and the gross asset value ratio and amending restrictions on the amount of investments in specific categories of assets; and amends definitions, including the definition of EBITDA.

On Jan. 28, the company also executed a second amendment to its second amended and restated credit agreement with Wells Fargo Bank as administrative agent.

The amendment extends the term of the company’s $300 million unsecured revolving line of credit to January 2019 from January 2016, with a one-year extension option subject to a 0.15% fee.

In addition, the amendment adjusts the interest rate spread over Libor and the annual facility fees. As amended, the current interest rate is Libor plus 105 bps, and the current annual facility fees are equal to 20 bps.

The syndicated line provides for the interest rate and facility fee to be adjusted based on changes in the company’s credit ratings. The Libor spread ranges from 87.5 bps to 155 bps, and the facility fee ranges from 12.5 bps to 30 bps.

The syndicated line amendment also includes amendments to the terms of the facility substantially consistent with the amendments made by the term loan amendment as described above.

Furthermore, the company executed a second amendment to its amended and restated revolving loan credit agreement with Wells Fargo Bank, which provides for a $30 million unsecured cash management line of credit.

The cash management line amendment, completed on Jan. 28, extends the term of the line to January 2019 from January 2016, with a one-year extension option subject to a 0.15% fee.

The cash management line amendment also amends the interest rates and includes facility fees (in lieu of the unused commitment fees under the previous agreement) consistent with those of the amended syndicated line.

The other amendments to the cash management line are substantially the same as the additional amendments made to the syndicated line.

In connection with the refinancing of the term loan, syndicated line and cash management line, the company expects to recognize an extinguishment loss of about $200,000 million relating to the write-off of a portion of unamortized deferred financing costs associated with the previous arrangements.

Post Apartment Homes is the operating subsidiary of Post Properties, Inc. an Atlanta-based real estate investment trust that develops and operates upscale multifamily communities.

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