Government Properties gets $1.3 billion credit facilities with lowered pricing, extended maturities

By Toni Weeks

San Luis Obispo, Calif., Nov. 24 – Government Properties Income Trust obtained $1.3 billion of new credit facilities on Monday, according to a press release.

The maximum borrowing capacity may be increased to up to a total of $2.5 billion under some circumstances.

The facilities include a $750 million unsecured revolving credit facility that matures Jan. 31, 2019 and can be extended by a year to Jan. 31, 2020. The new revolver, which replaces the company’s existing $550 million unsecured revolving credit facility that was set to mature Oct. 19, 2015, initially bears interest at Libor plus 125 basis points, an improvement from the previous revolver’s rate of Libor plus 150 bps.

The company has also replaced its existing $350 million unsecured term loan facility due Jan. 11, 2017 with the following two term loan tranches:

• A $300 million unsecured term loan due March 31, 2020, with an initial interest rate of Libor plus 140 bps; and

• A $250 million unsecured term loan due March 31, 2022, with current interest of Libor plus 180 bps.

The previous term loan facility accrued interest at Libor plus 175 bps. Pricing in all cases is based on the company’s credit ratings.

Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and Bank of America Merrill Lynch were the joint lead arrangers for the new revolving credit facility and the term loan due 2020. Wells Fargo Bank, NA is the administration agent, and Bank of America, NA and Citibank NA are the syndication agents. Royal Bank of Canada, Mizuho Bank, Ltd., U.S. Bank NA and Compass Bank are the documentation agents.

For the term loan due 2022, Wells Fargo Securities and PNC Capital Markets LLC were the joint lead arrangers, and Wells Fargo Bank is the administrative agent. PNC Bank, NA is the syndication agent, and Regions Bank is the documentation agent.

The real estate investment trust owns properties leased primarily to the U.S. government and state governments. It is based in Newton, Mass.

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