Agree cuts rates on $85 million revolver due 2015; paydown planned

By Susanna Moon

Chicago, Dec. 17 - Agree LP, the majority-owned operating partnership of Agree Realty Corp., reduced interest on its $85 million unsecured revolving credit facility to Libor plus 150 basis points.

The spread over Libor ranges from 150 bps to 215 bps, based on leverage.

The company amended the terms of its revolver last Thursday with Bank of America, NA as administrative agent, extending the maturity to Oct. 26, 2015, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also provides for two one-year extension options, to October 2017.

The facility includes a $50 million accordion feature to the boost the size to $135 million, to accommodate the company's business plans.

Lenders also include PNC Bank, Bank of Montreal and U.S. Bank.

Paydowns, refinancing

Agree also plans to pay down debt under its unsecured credit facility using proceeds from a $23.6 million secured commercial mortgage-backed securities financing with Morgan Stanley Mortgage Capital Holdings LLC, according to a company press release. The 10-year, non-recourse loan is secured by 12 single tenant properties, bears interest at 3.6% per year and matures in January 2023.

"These transactions, in conjunction with a recently closed $25 million term loan, provide the company with increased capacity to fund its growing acquisition and development platforms while taking advantage of today's low interest rate environment," Joey Agree, president and chief operating officer, said in the release.

This year, the company raised or refinanced $156.5 million of total debt, including $71.5 million of long-term mortgage debt in 2012 at a weighted-average fixed annual rate of 3.22%, including the effect of interest swap agreements, the release noted. The company currently has a weighted-average debt maturity of 5.8 years and no aggregate annual maturities exceeding $10 million until 2017.

Agree Realty is a real estate investment trust located in Farmington Hills, Mich.

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