Healthcare Realty restates term loan, revolver for $1.05 billion total

By Wendy Van Sickle

Columbus, Ohio, May 31 – Healthcare Realty Trust Inc. amended and restated its term loan and revolving credit agreements with Wells Fargo Bank, NA as administrative agent on Friday to extend their maturities and trim the spread over Libor by 10 basis points in each case, according to an 8-K filing with the Securities and Exchange Commission.

The revolving credit agreement provides for an unsecured $700 million four-year revolving credit facility with a $90 million sublimit for standby letters of credit and a $60 million sublimit for swingline loans. The revolver matures on May 31, 2023.

Borrowings bear interest at Libor plus a margin ranging from 77.5 basis points to 145 bps, depending on credit ratings of the company. The margin is initially 90 bps.

The revolver’s commitment fee ranges from 12.5 bps to 30 bps, depending on ratings, and is initially 20 bps.

The revolver has to six-month extension options, each of which would be subject to a fee of 6.25 bps.

The term loan agreement restates the company’s term loan that was due 2022, increasing existing loans to $200 million and adding a $150 million seven-year term loan facility.

The $200 million tranche A term loan matures on May 31, 2024.

Borrowings under the tranche A term facility will bear interest at Libor plus 85 bps to 165 bps. The margin depends on ratings and is initially 100 bps.

The tranche B term facility has a delayed draw feature that allows the company up to nine months to draw against the commitments. At closing, no loans were outstanding under the tranche B term facility, which will mature on June 1, 2026.

Borrowings under the tranche B term facility will bear interest at Libor plus 145 bps to 240 bps. The margin depends on ratings and is initially 160 bps.

Committed amounts that remain undrawn are subject to a ticking fee ranging from 12.5 bps to 30 bps, also based on the company’s unsecured debt ratings. The ticking fee is currently 20 bps.

At closing, $298 million that was outstanding under the existing revolver was transferred to the new credit facility. Proceeds from the term loans were applied to the revolver, leaving balances of $253 million and $200 million on the revolver and term loan, respectively.

Bank groups

Wells Fargo Securities, LLC and JPMorgan Chase Bank, NA are the bookunners for the revolver.

Wells Fargo, JPMorgan, U.S. Bank NA and PNC Capital Markets LLC are the lead arrangers; JPMorgan, U.S. Bank and PNC Bank, NA are the co-syndication agents.

Wells Fargo, PNC Capital Markets and U.S. Bank are the joint lead arrangers and joint bookrunners for the term loans.

PNC Bank, NA and U.S. Bank NA are the syndication agents.

Bank of Montreal, Fifth Third Bank and Branch Banking and Trust Co. are the documentation agents for the tranche A term loan.

Bank of Montreal and Fifth Third Bank are the documentation agents for the tranche B term loan facility.

Rate swaps

On May 15, the company entered into two interest rate swaps totaling $50 million to hedge the Libor portion of the cost of borrowing under the company’s variable rate debt to a fixed rate of 2.13%.

As of May 31, Healthcare Realty had eight interest rate swaps outstanding in the total notional amount of $175 million with maturity dates ranging from December 2023 to May 2026 and with a weighted average fixed interest rate of 2.29%, before the applicable margin rates.

Healthcare Realty is a Nashville-based a real estate investment trust that integrates owning, managing and developing properties associated primarily with outpatient health care services.

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