Colony Capital reduces revolver to $750 million, adjusts covenants

By Sarah Lizee

Olympia, Wash., April 11 – Colony Capital, Inc. operating company Colony Capital Operating Co., LLC amended its credit agreement with JPMorgan Chase Bank, NA as administrative agent on April 5 to reduce the total amount of revolving commitments to $750 million from $1 billion, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also provides that the borrower’s option to increase the borrowing commitments under the credit agreement is reduced to a total maximum of to $1,125,000,000 from $1.5 billion.

The maximum amount available for borrowing under the credit agreement at any time is limited by a borrowing base of investment assets, with the valuation of such investment assets generally determined according to a percentage of adjusted net book value or a multiple of base management fee EBITDA.

Under the amendment, the valuation of the borrowing base is reduced to 90% from 100% at any time that the consolidated fixed charge coverage ratio is less than 1.5 to 1.0.

In addition, the amendment provides that the borrower’s EBITDA plus lease expenses to fixed charges for any period of four consecutive fiscal quarters will not be less than 1.50 to 1.00 for any fiscal quarter prior to the fiscal quarter ending March 31, 2019, or 1.30 to 1.00 for the fiscal quarter ending March 31, 2019 and any fiscal quarter onwards.

The real estate investment trust is based in Los Angeles.

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