Kite Realty amends $200 million revolving facility, extends to 2017

By Susanna Moon

Chicago, March 4 - Kite Realty Group Trust closed a $200 million revolving credit facility at Libor plus 165 basis points to 250 bps, based on leverage, pushing out the maturity to Feb. 26, 2017.

The company and Kite Realty Group, LP, the operating partnership, amended the facility on Feb. 26 with KeyBanc Capital Markets and BofA Merrill Lynch as co-lead arrangers, according to an 8-K filing with the Securities and Exchange Commission.

KeyBank NA is the administrative agent. Bank of America, NA is the syndication agent. Wells Fargo, NA, as successor to Wachovia Bank, NA, and U.S. Bank NA are the co-documentation agents.

The previous credit facility had been set at mature on April 30, 2016, and the new facility has a one-year extension option.

At closing, the maximum amount available for the operating partnership to borrow under the agreement was about $50 million.

The company may increase the revolving loan commitment under the agreement to $400 million with lender commitments.

Kite realty may tap up to $25 million of the revolving loan commitment for the issuance of letters of credit, and the terms include swingline loan capacity for up to $25 million in same-day borrowings.

The unused fee is 25 bps or 35 bps, based on the amount of borrowings under the credit agreement.

Proceeds will be used for general corporate purposes.

Covenant terms

The loan terms require the company to maintain a maximum leverage ratio of 60%, with a surge provision permitting the maximum leverage ratio to increase to 62.5% for one period of up to two consecutive quarters; an adjusted EBITDA-to-fixed charges coverage ratio of at least 1.5 times; a minimum tangible net worth of $350 million (plus 75% of the net proceeds of any future equity issuances); ratio of secured debt to total asset value of no more than 0.55 times; a minimum unencumbered property pool occupancy rate of 80%; a ratio of floating-rate debt to total asset value of no more than 0.35 times; and ratio of recourse debt to total asset value of no more than 0.30 times.

The total amount of unsecured debt of the company, operating partnership and their respective subsidiaries may not exceed the lesser of (a) 62.5% of the value of all properties then included in an unencumbered pool of properties that satisfy certain requirements and (b) the maximum principal amount of debt that would not cause the ratio of certain net operating income less capital reserves to debt service under the agreement to be less than 1.4 times.

Term loan changes

The company amended its term loan on Feb. 26 with KeyBank NA as administrative agent.

The term loan will mature, as scheduled, on April 30, 2019.

The amendment modifies the following provisions of the term loan to make them consistent with those in the credit agreement:

• The maximum leverage ratio as reduced to 60% from 62.5%;

• The surge provision permitting an increase in the maximum leverage ratio for one period of up to two consecutive quarters was reduced to 62.5% from 65%; and

• The required minimum tangible net worth was increased to $350 million (plus 75% of the net proceeds of any future equity issuances) from $325 million (plus 75% of the net proceeds of any future equity issuances).

Kite Realty is an Indianapolis-based real estate investment trust focused on neighborhood and community shopping centers.

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