Hudson Pacific expands revolver to $1 billion, extends to 2025

By Marisa Wong

Los Angeles, Dec. 30 – Hudson Pacific Properties, LP entered into a fourth amended and restated credit agreement on Dec. 21 with Wells Fargo Bank, NA as administrative agent to increase the revolving credit facility to $1 billion and extend the term to Dec. 21, 2025, according to an 8-K filing with the Securities and Exchange Commission.

The existing credit agreement entered into on March 13, 2018 had provided for a $600 million unsecured revolver and an $850 million unsecured term loan prior to its repayment.

Hudson Pacific has the option to extend the maturity date of the amended revolver for one additional year.

The company may increase the availability of the facilities under the credit agreement as long as the aggregate commitments under the facilities do not exceed $2 billion.

Borrowings bear interest at Libor plus 105 basis points to 150 bps, depending on the company’s leverage ratio, or, if the company makes the credit rating election, Libor plus 70 bps to 140 bps, depending on the credit rating.

In addition, the revolver is subject to a sustainability-linked pricing component. Pricing can decrease by up to 2 bps depending on if the company meets certain sustainability performance targets.

The revolver is also subject to a facility fee of 15 bps to 30 bps, depending on the company’s leverage ratio, or 10 bps to 30 bps, depending on credit ratings. Unused amounts under the facility are not subject to a separate fee.

The company has the right to terminate or reduce unused commitments under any facility without penalty or premium.

The restated credit agreement’s financial covenants are substantially the same as those in the existing credit agreement, except that the maximum ratio of secured debt to total asset value of the company and its consolidated subsidiaries has been reduced to 0.45 to 1.00.

Additionally, total asset value of the company on a consolidated basis now includes management fee income for the most recent four fiscal quarters; the acquisition price of studio service subsidiaries acquired during the most recent four fiscal quarters, multiplied by eight; and earnings from studio service operations for the most recent four fiscal quarters, multiplied by eight.

Hudson Pacific Properties, Inc. is the guarantor of the obligations under the amended and restated credit agreement. If the company fails to maintain a credit rating of at least BBB- from S&P or Baa3 from Moody’s, its subsidiaries that own unencumbered properties and some other material subsidiaries will also be required to become guarantors under the credit agreement.

Wells Fargo Securities, LLC and BofA Securities, Inc. are the active lead arrangers and joint bookrunners; U.S. Bank NA, KeyBanc Capital Markets, Inc. and Royal Bank of Canada are joint lead arrangers; Bank of America, NA is syndication agent, U.S. Bank, KeyBanc, Royal Bank of Canada, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., Barclays Bank plc and Fifth Third Bank, NA are documentation agents; BMO Harris Bank, NA and Regions Bank are senior managing agents; and Wells Fargo Securities is sustainability structuring agent.

Proceeds will be used to pay pre-development and development costs incurred in connection with properties owned by Hudson Pacific; to finance permitted acquisitions; to finance capital expenditures and the repayment of debt; to provide for general working capital needs and for other general corporate purposes; and to pay fees and expenses incurred in connection with the amended and restated credit agreement.

The real estate investment trust is based in Los Angeles.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.