W.P. Carey details $1 billion revolver, $250 million term loan

By Marisa Wong

Madison, Wis., Feb. 4 - W.P. Carey Inc. disclosed details of its $1.25 billion senior unsecured credit facility in an 8-K filed Tuesday with the Securities and Exchange Commission.

The company entered into a second amended and restated credit agreement on Jan. 31, the closing date of its merger with Corporate Property Associates 16 - Global Inc., with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer. Bank of America Merrill Lynch and J.P. Morgan Securities, LLC are the joint bookrunners and joint lead arrangers, JPMorgan Chase Bank, NA is the syndication agent. Barclays Bank plc, Citibank, NA, U.S. Bank NA and Wells Fargo Bank, NA are the co-documentation agents. Capital One, NA and Regions Bank are the senior managing agents, and Fifth Third Bank, PNC Bank NA and RBS Citizens, NA are the other managing agents.

The facility includes a $250 million term loan, the proceeds of which were available in a single draw on the closing date. The loan has maturity of two years with two one-year extension options.

The facility is also comprised of a $1 billion revolving loan facility. The maturity of the four-year revolver may be extended by one year. The revolver has a $50 million sublimit for swingline loans and a $50 million sublimit for the issuance of letters of credit.

The credit facility has a $500 million accordion feature. The additional amount may be allocated as an increase to the revolver, the term loan or, if the term loan has been terminated, an add-on term loan.

Because the company had an investment-grade debt rating as of the closing date, borrowings under the revolver bear interest at Libor plus an applicable rate of 92.5 basis points to 170 bps, and term loan borrowings bear interest at Libor plus 100 bps to 195 bps. Based on the company's rating at closing, the applicable rate is 110 bps for the revolver and 125 bps for the term loan.

The company will also pay a facility fee that ranges from 12.5 bps to 30 bps.

The credit facility includes financial maintenance covenants, including a maximum leverage ratio, maximum secured debt ratio, minimum equity value ratio, minimum fixed-charge coverage ratio and minimum unsecured interest coverage ratio.

Proceeds will be used for working capital, to refinance existing debt, for new investments and for other general corporate purposes, including the merger.

New York-based W.P. Carey is a publicly traded REIT that provides long-term sale-leaseback and built-to-suit financing.

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