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Mid-America Apartments gets $150 million five-year term loan
By Angela McDaniels
Tacoma, Wash., March 5 - Mid-America Apartment Communities Inc. entered into a $150 million unsecured term loan on Thursday through its operating partnership, Mid-America Apartments, LP, according to an 8-K filing with the Securities and Exchange Commission.
The interest rate on the five-year term loan is Libor plus 140 basis points to 215 bps, depending on the company's leverage ratio.
If the company obtains an additional investment-grade rating, the spread over Libor will be 110 bps to 205 bps. The company is rated BBB by Fitch Ratings.
The company entered into three forward interest rate swap agreements totaling a notional amount of $150 million, effectively fixing the variable interest rate on the term loan at 2.71%, including the credit spread at the time of the closing. The interest rate swaps have the same maturity as the term loan.
Mid-America Apartment Communities agreed to guarantee the term loan.
The company said the covenants for the term loan mirror its recently closed $250 million unsecured credit facility.
Keybank NA and J.P. Morgan Securities, LLC acted as joint lead arrangers. Keybank is the administrative agent. JPMorgan Chase Bank, NA is the syndication agent. Regions Bank, UBS Loan Finance LLC and Bank of Montreal acted as co-documentation agents.
The company borrowed $50 million at closing to pay down outstanding balances under its existing secured credit facilities. Proceeds will also be used to acquire and/or develop properties and for other general corporate purposes.
Mid-America Apartment Communities is an apartment-only real estate investment trust based in Memphis.
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