Archstone upsizes term loan B, downsizes term loan A

By Sara Rosenberg

New York, Dec. 3 - Archstone-Smith Trust revised its credit facility structure to increase the size of the term loan B and decrease the size of the term loan A, according to an 8-K filed with the Securities and Exchange Commission Monday.

The term loan B is now sized at $3.014 billion, up from $1.981 billion, and the term loan A is now sized at $1.75 billion, down from $2.4 billion.

The five-year term loan B is priced at Libor plus 325 basis points and the four-year term loan A is priced at Libor plus 300 bps.

The company's $5.514 billion credit facility (BB-) also includes a $750 million four-year revolver that is priced at Libor plus 300 bps.

Archstone changed the tranching under the credit facility through an amendment that was completed on Nov. 27.

Under the amended credit agreement, if the combined leverage ratio and tangible net worth covenants are not satisfied on the last day of a fiscal quarter, outstanding loans shall be prepaid and/or outstanding letters of credit cash collateralized by an amount necessary to bring the company in compliance with these financial covenants, and the interest rates of all loans will increase by 100 bps until the date of such prepayment or collateralization.

In addition, the amendment also provides for a $250 million accordion feature under the term loan B and a $250 million accordion feature under the revolver, provided that the total revolving credit commitments and outstanding term loans may not exceed $1 billion at any time.

Lehman Brothers, Bank of America and Barclays are the lead banks on the deal.

Proceeds from the credit facility were used to help fund the buyout of the company by Tishman Speyer and Lehman Brothers for $60.75 per unit in cash. The transaction was valued at $22.2 billion, including the assumption and refinancing of Archstone-Smith's outstanding debt and excluding transaction costs.

Archstone-Smith is an Englewood, Colo.-based real estate investment trust. Tishman Speyer is a New York-based owner, developer, operator and fund manager of real estate.

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