Hudson Pacific gets $300 million five-, seven-year delayed-draw loans

By Susanna Moon

Chicago, Nov. 20 – Hudson Pacific Properties, Inc.’s operating partnership Hudson Pacific Properties, LP obtained a $175 million five-year unsecured delayed-draw term loan and a $125 million seven-year unsecured delayed-draw term loan, according to an 8-K filing with the Securities and Exchange Commission.

For the five-year facility, interest will be Libor plus 130 basis points to 220 bps based on leverage. For the seven-year loan, the margin over Libor will range from 160 bps to 255 bps.

If the company obtains a credit rating for its senior unsecured long-term debt, the operating partnership may make an irrevocable change in the interest rate to

• For the five-year term loan, Libor plus 90 bps to 185 bps; and

• For the seven-year loan, Libor plus 140 bps to 235 bps.

The operating partnership has the right to terminate or reduce unused commitments under either facility without penalty or premium. The company also has the right to increase the availability of the facilities as long as the aggregate commitments do not exceed $475 million.

Beginning Feb. 17, each facility is subject to an unused commitment fee of 20 bps.

The company entered into a credit agreement on Tuesday with Wells Fargo Bank, NA as administrative agent, Wells Fargo Securities, LLC and Bank of America Merrill Lynch as lead arrangers for the five-year facility, Wells Fargo and U.S. Bank NA as lead arrangers for the seven-year facility, Bank of America, NA as syndication agent for the five-year facility, U.S. Bank as syndication agent for the seven-year facility and MUFG Union Bank NA as documentation agent for the five-year facility.

Proceeds will be used to repay outstanding borrowings under the company’s unsecured revolving credit facility and for general corporate purposes.

If the company fails to maintain a credit rating of at least BBB- from Standard & Poor’s or Baa3 from Moody’s Investors Service, the company’s subsidiaries that own unencumbered properties will also be required to become guarantors under the agreement.

The financial covenants include

• A maximum leverage ratio of 0.6 times, except that it may increase to 0.65 times for up to two consecutive calendar quarters immediately following a material acquisition;

• A minimum fixed charge coverage ratio of 1.5 times;

• A maximum secured debt leverage ratio of 0.55 times; and

• A minimum unsecured interest coverage ratio of 2 times.

Hudson Pacific is a Los Angeles-based real estate investment trust focused on office and media and entertainment properties in California.

© 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.