Healthcare Trust of America locks in $155 million seven-year term loan

By Susanna Moon

Chicago, July 20 - Healthcare Trust of America, Inc.'s operating partnership, Healthcare Trust of America Holdings, LP, obtained a $155 million seven-year unsecured term loan facility at Libor plus 200 basis points.

Interest will range from Libor plus 155 bps to 240 bps, based on the operating partnership's credit rating, and the company may borrow up to $45 million more, for a total facility size of $200 million.

Proceeds may be used for working capital needs and general corporate purposes, including acquisitions, repayment of debt and repurchase shares under a recent tender offer.

The operating partnership closed a credit agreement on July 20 with Wells Fargo Bank as administrative agent and Wells Fargo Securities, LLC, as lead arranger, according to an 8-K filing with the Securities and Exchange Commission.

HTA plans to swap the entire $155 million to a fixed rate, with $50 million effectively fixed at 3.39% per year at closing. The term loan will bring HTA's weighted average borrowing cost down to 4.2% per year, assuming the entire amount is fixed at this rate, down from 5.05% per year at the end of 2011, according to a press release by Healthcare Trust of America, Inc.

The operating partnership's obligations under the loan agreement are guaranteed by the company and may be guaranteed by some of its subsidiaries.

The covenants require maintaining a maximum ratio of total debt to total asset value; a maximum ratio of secured debt to total asset value; a minimum ratio of EBITDA to fixed charges; a minimum tangible net worth; a maximum ratio of unsecured debt to unencumbered asset value; and a minimum ratio of unencumbered net operating income to unsecured interest expense.

The facility was upsized from initial plans for $100, due to lender demand, the release noted.

The term loan will mature in July 2019.

Capital One, NA and PNC Bank are co-documentation agents. Huntington National Bank and National Bank of Arizona, NA also are lenders.

"The new term loan is further reflection of the access to capital afforded to [the company] as a result of its recent listing on the NYSE and by its investment-grade credit profile," Kellie S. Pruitt, chief financial officer at Healthcare Trust, said in the release.

"This facility will allow [Healthcare Trust] to lock in today's low rates and further extend maturities, while preserving [Healthcare Trust]'s liquidity and capacity for growth."

Healthcare Trust of America is a real estate investment trust based in Scottsdale, Ariz.

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