Kilroy Realty closes $400 million four-year term loan

By Marisa Wong

Los Angeles, Oct. 3 – Kilroy Realty Corp.’s operating partnership Kilroy Realty, LP has closed on a new unsecured term loan facility for an aggregate amount of $400 million, according to a press release.

The term loan is guaranteed by the parent company, according to an 8-K filing with the Securities and Exchange Commission.

The term loan has a maturity date of Oct. 3, 2026, which reflects two one-year extension options. The first extension is subject to a 12.5-basis point extension fee, and the second extension is subject to a 15-bps extension fee.

The term loan also includes a delayed-draw feature and a $100 million accordion.

Pricing is based on ratings. The interest rate is currently SOFR plus 95 bps. The applicable margin generally ranges from 80 bps to 160 bps. The reference rate includes a credit spread adjustment of 10 bps.

There is also a ticking fee on the unused term loan commitments that ranges from 12.5 bps to 30 bps, depending on ratings.

The term loan requires the operating partnership to comply with the following financial covenants: maximum total debt to total asset value of less than 60%; fixed charge coverage ratio of greater than 1.5x; unsecured debt ratio of greater than 1.67x; and unencumbered asset pool debt service coverage of greater than 1.75x.

The company expects to use the proceeds for general corporate purposes, including funding development and redevelopment projects.

A total of 13 lenders participated in the term loan.

JPMorgan Chase Bank, NA is administrative agent.

BofA Securities, Inc. is syndication agent.

JPMorgan, BofA Securities, PNC Capital Markets LLC, U.S. Bank NA and Bank of Nova Scotia are joint bookrunners and joint lead arrangers.

Bank of New York Mellon, Bank of the West, Barclays Bank plc, KeyBank NA, Sumitomo Mitsui Banking Corp., Associated Bank, NA, MUFG Union Bank, NA and Comerica Bank are co-documentation agents.

In connection with the term loan, the company also amended its unsecured revolving credit agreement to replace the Libor-based interest rate option with a SOFR-based interest rate option.

Kilroy is a real estate investment trust based in Los Angeles.

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