Corporate Office Properties gets agreement for $1.4 billion facility

By Sara Rosenberg

New York, Aug. 9 - Corporate Office Properties LP closed on a new $1.4 billion credit facility, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

J.P. Morgan Securities LLC and KeyBanc Capital Markets acted as the joint lead arrangers and bookrunners on the deal that was completed on Aug. 5, but will not become effective until Sept. 1.

The facility consists of a $1 billion unsecured revolver due Sept. 1, 2014 and a $400 million term loan due Sept. 1, 2015.

Pricing on the revolver ranges from Libor plus 175 basis points to 250 bps based on leverage, and the commitment fee ranges from 25 bps to 35 bps.

Term loan pricing ranges from Libor plus 165 bps to 240 bps based on leverage.

The revolver and the term loan have a $500 million accordion feature and one-year extension options.

Financial covenants under the facility include total debt to total asset value of 0.60 to 1.00, adjusted EBITDA to fixed charges of 1.50 to 1.00, secured debt to total asset value of 0.45 to 1.00 for 24 months and 0.40 to 1.00 thereafter, and unsecured debt to unencumbered asset value of 0.60 to 1.00.

Proceeds are being used to refinance an existing credit facility that is set to mature on Sept. 30.

Corporate Office is a Columbia, Md.-based specialty office real estate investment trust that focuses primarily on strategic customer relationships and specialized tenant requirements in the United States, government and defense information technology sectors and data centers serving such sectors.

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