Monogram Residential Trust enters into $200 million four-year revolver

By Marisa Wong

Madison, Wis., Jan. 20 – Monogram Residential Trust, Inc., through operating partnership Monogram Residential OP LP, entered into a $200 million revolving credit facility on Jan. 14, according to an 8-K filing with the Securities and Exchange Commission.

KeyBank NA is the administrative agent, swingline lender and letter-of-credit issuer with KeyBanc Capital Markets Inc. and J.P. Morgan Securities LLC as co-lead arrangers and bookrunners and JPMorgan Chase Bank, NA as syndication agent.

The revolver includes a $25 million sublimit for swingline loans and a $25 million sublimit for letters of credit.

The revolver may be increased up to a total of $400 million.

The facility matures on Jan. 14, 2019, subject to one 12-month extension. The extension option is exercisable upon payment of a 0.15% extension fee.

Until Monogram obtains an investment-grade credit rating from at least two of Standard & Poor’s, Fitch Ratings or Moody’s Investors Service, amounts outstanding under the revolver will bear interest at Libor plus 250 basis points to 325 bps, depending on the company’s leverage ratio.

Any time after the company obtains an investment-grade rating, it may elect on a one-time basis to have the interest rate be based on its credit rating rather than the leverage ratio. In this case, the interest rate would be Libor plus 87.5 bps to 165 bps.

Until the company chooses to have pricing be based on ratings, it must pay an unused fee based on (a) an annual rate of 0.30% if less than 50% of the revolver is being used or (b) an annual rate of 0.25% if 50% or more of the revolver is being used. Once pricing is based on ratings, the unused fee no longer accrues but the company must instead pay an annual facility fee ranging form 12.5 bps to 30 bps, depending on the credit rating.

The credit facility requires the maintenance of financial covenants, including a maximum consolidated total indebtedness to gross asset value ratio, a minimum adjusted consolidated EBITDA to consolidated fixed charges ratio, a minimum consolidated tangible net worth, a maximum secured debt to gross asset value ratio and a maximum secured recourse debt to gross asset value ratio.

Proceeds may be used to acquire and/or develop properties, to refinance existing and future debt, for capital improvements or general working capital needs and for stock repurchases.

Monogram is a Plano, Texas-based owner, operator and developer of luxury apartment communities.

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