Four Corners gets restated $400 million loan, $250 million revolver

By Angela McDaniels

Tacoma, Wash., Oct. 2 – Four Corners Property Trust entered into an amended and restated credit agreement that provides for a $400 million five-year term loan and a $250 million four-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The new credit facility replaces the company’s existing $750 million bank credit facility.

The restatement extended the maturities of both the term loan and the revolver by two years and increased the company’s weighted average debt maturity to 5.9 years. The company expects to save at least $1.8 million in annual cash interest expense due to reduced margin pricing and lower unused revolver fees.

The new term loan matures Nov. 9, 2022.

The term loan currently bears interest at Libor plus 135 basis points versus pricing of Libor plus 170 bps under the previous term loan. Including swaps that effectively fix the interest rate, the term loan’s all-in cash interest rate is 2.7% through November 2018.

Four Corners established additional swaps in the third quarter that fix 75% of the term loan’s rate exposure from November 2018 through the new maturity date of November 2022. The all-in cash interest rate on the 75% of the term loan that is fixed is 3.0%, 3.1%, 3.4% and 3.5% for 2019, 2020, 2021 and 2022, respectively.

The new revolver matures Nov. 9, 2021 and can be extended for two six-month periods until November 2022 at the company’s option and subject to payment of an 0.075% extension fee.

Borrowings under the new revolver currently bear interest at Libor plus 145 bps versus pricing of Libor plus 175 bps under the previous revolver. The unused fee on the revolver was reduced to 30 basis points.

The credit agreement includes a $250 million accordion feature such that the credit facilities can be increased up to $900 million in aggregate.

JPMorgan Chase Bank NA, Barclays Bank plc and Bank of America Merrill Lynch were the joint lead arrangers. Barclays and Bank of America, NA were the syndication agents. Fifth Third Bank, U.S. Bank NA and Wells Fargo Bank were the documentation agents. JPMorgan is the administrative agent. Other bank participants were Morgan Stanley Bank, Goldman Sachs Bank, Raymond James Bank, Seaside National Bank & Trust and Woodforest National Bank.

The credit agreement has the following financial covenants: total debt to consolidated capitalization value not to exceed 60%, mortgage-secured leverage ratio not to exceed 40%, total secured recourse debt not to exceed 5% of consolidated capitalization value, minimum fixed-charge coverage ratio of 1.5 to 1.0, minimum consolidated tangible net worth, maximum unencumbered leverage ratio not to exceed 60% and minimum unencumbered interest coverage ratio not less than 1.75 to 1.00.

Based in in Mill Valley, Calif., Four Corners is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties.

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