Kite Realty Group increases revolver to $600 million, extends to 2022

By Sarah Lizee

Olympia, Wash., April 25 – Kite Realty Group Trust and operating partnership Kite Realty Group, LP amended their credit agreement to increase the amount available under the unsecured revolving credit facility to $600 million from $500 million and extend the maturity to April 22, 2022 from July 28, 2020.

The amendment was completed on Tuesday with KeyBank NA is the administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Additionally, the letter-of-credit sublimit was increased to $60 million from $50 million, and the swingline loan capacity was raised to $60 million from $50 million in same-day borrowings.

The revolver has two six-month extension options and may be increased to $1.2 billion, compared to $1 billion under the existing credit agreement.

Borrowings bear interest at Libor plus 105 to 150 basis points, down from 135 to 195 bps previously, depending on the operating partnership’s leverage ratio.

If the operating partnership chooses its investment-grade credit ratings as the basis for determining the interest rate, borrowings will bear interest at Libor plus 82.5 to 155 bps, compared to 85 to 155 bps previously.

Term loan B borrowings continue to bear interest at Libor plus 130 to 190 bps for leveraged-based pricing and Libor plus 90 to 175 bps for ratings-based pricing.

Interest is initially Libor plus 115 bps for revolving loans and Libor plus 130 bps for term loan B borrowings.

The facility fee ranges from 15 to 30 bps for leveraged-based pricing, compared to 15 to 25 bps previously. The fee continues to be 12.5 to 30 bps for ratings-based pricing.

The amendment improves the operating partnership’s leverage ratio calculation by changing the definition of capitalization rate to 6.5% from 6.75%, which increases the total asset value. The companies also amended their seven-year term loan on Tuesday with KeyBank to improve the leverage ratio calculation on the same terms.

Financial covenants include a maximum leverage ratio of 60%, a maximum adjusted EBITDA to fixed charges coverage ratio of 1.5 times, a maximum ratio of secured debt to total asset value of 0.45 times, a maximum ratio of unsecured debt to unencumbered pool value of 0.6 times and a maximum ratio of net operating income attributable to the then current eligible unencumbered pool of properties to unsecured debt interest expense of 1.75 times at any time.

Covenants under both the amended revolver and term loan related to minimum tangible net worth, secured recourse debt and permitted investments were deleted, the filing noted.

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

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