American Realty draws $200 million loan for mortgage, revolver debt

By Susanna Moon

Chicago, April 18 - American Realty Capital Trust, Inc. drew down $200 million of its interim loan on Monday to prepay about $161.2 million of its fixed-rate mortgage debt and for general working capital purposes, including repaying about $23.8 million of debt outstanding under its revolving credit facility.

The company closed a $200 million senior secured interim term loan due Oct. 16, 2012 on Monday led by Wells Fargo Bank, NA. The loan was announced on March 30.

Interest on the interim loans is Libor plus 195 basis points, based on leverage, which works out to about 2.2%.

American Realty amended its revolving credit facility with RBS Citizens, NA on Monday, through American Realty Capital Operating Partnership, LP, according to an 8-K filing with the Securities and Exchange Commission.

The amendment allows for the incurrence of debt under the interim term loan agreement and the replacement or refinancing of the interim loan with the term loan.

As a result of the mortgage prepayments, the company's annualized interest expense was reduced by $4.3 million, and the weighted-average interest rate on all borrowings was reduced to about 4.42% from about 5.27%.

As noted on March 30, the company also plans to enter into a senior secured five-year term loan facility via Wells Fargo. The company expects the term loan to replace the interim loan.

The company said on March 30 that the five-year term loan was expected to bear interest at a fixed-rate based on the then-current five-year Treasury swap rate plus 195 bps, after giving effect to expected swap arrangements.

The amended interim loan terms provide that the company's distributions may not exceed the greater of (i) 95% of its funds from operations or (ii) the amount required for it to qualify and maintain its status as a real estate investment trust for U.S. federal income tax purposes.

American Realty is a New York-based real estate company that owns and acquires single-tenant free standing commercial real estate properties.

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