Seritage Growth Properties gets $200 million refinanced term loan

By Marisa Wong

Morgantown, W.Va., Dec. 28 – Seritage Growth Properties refinanced its existing $200 million unsecured term loan with a new $200 million unsecured term loan on Dec. 27, according to an 8-K filing with the Securities and Exchange Commission.

The company had drawn $85 million against the existing facility set to mature Dec. 31, 2017.

The lenders under the existing facility, JPP, LLC and JPP II, LLC, each a Delaware limited liability company controlled by ESL Investments, Inc., have maintained their funding of $85 million in the new facility, with JPP appointed as administrative agent. Edward S. Lampert, Seritage’s chairman, is the stockholder, chief executive officer and director of ESL Investments.

An affiliate of Empyrean Capital Partners, LP has committed and funded $60 million under the new facility, for a total of $145 million committed and funded at closing.

The total commitments of the lenders under the facility are capped at $200 million, and the company has the right to syndicate the remaining $55 million with the initial lenders or new lenders.

The company expects to use proceeds of the new loan to, among other things, refinance the existing facility, to fund redevelopment projects and for other general corporate purposes.

The facility matures on the earlier of Dec. 31, 2018 and the date on which the outstanding debt under the company’s existing mortgage and mezzanine facilities are repaid in full.

Loans will bear interest at 6.75%. The rate under the existing facility was 6.5%.

In addition, the company paid each initial lender a 1% upfront fee at closing.

The facility requires the company to maintain at all times a net worth of not less than $1 billion and a leverage ratio of up to 60%.

Seritage is a real estate investment trust formed by Hoffman Estates, Ill.-based Sears Holdings.

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