Armada Hoffler gets $150 million four-year revolver, $50 five-year loan

By Susanna Moon

Chicago, Feb. 25 – Armada Hoffler Properties, Inc. entered into a $150 million four-year senior unsecured revolving credit facility and a $50 five-year senior unsecured term loan.

Interest on the revolver is initially Libor plus 155 basis points, based on leverage, with a spread of Libor plus 140 bps to 200 bps. Interest on the term loan is initially Libor plus 150 bps, with a spread ranging from 135 bps to 195 bps.

The company entered into the credit agreement last Friday with Regions Capital Markets as joint lead arrangers and bookrunners, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent. Regions Bank is the syndication agent.

The revolver will mature on Feb. 20, 2019 and has a one-year extension option.

The term loan is due Feb. 20, 2020, and the facility includes an accordion that allows total commitments to be upsized to $350 million with lender commitments.

The facility replaces the company’s $155 million senior secured revolving credit facility dated May 13, 2013 with Bank of America as administrative agent, which had been set to mature on May 13, 2016.

At closing, the company drew $54 million under the revolver and $50 million under the term loan to retire the previous credit facility and to repay about $39 million of other debt encumbering properties in the company’s portfolio for the purpose of unencumbering those properties, the filing said.

Proceeds also will be used for general corporate purposes, including funding acquisitions and development and redevelopment of properties in the company’s portfolio and for working capital.

The unused fee is 15 bps or 25 bps, depending on the amount of borrowings.

More loan terms

The financial covenants include the following:

• Total leverage ratio of no more than 60%;

• Ratio of adjusted EBITDA to fixed charges of no less than 1.5 times;

• Tangible net worth of no less than the sum of $220 million and 75% of the net equity proceeds after Dec. 31;

• Ratio of variable-rate debt to total asset value of the consolidated group of no more than 30%;

• Ratio of secured debt to total asset value of the consolidated group of no more than 45%; and

• Ratio of secured recourse debt to total asset value of the consolidated group of no more than 25%.

“We believe the expanded facility demonstrates the continued strength of our financial position and provides us with greater flexibility to fund future growth,” Mike O’Hara, the company’s chief financial officer, said in a company press release.

Armada is a real estate company is based in Virginia Beach, Va.

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