Cole Operating amends, restates up to $1.4 billion credit agreement

By Tali Rackner

Norfolk, Va., March 20 – Cole Credit Property Trust IV, Inc. entered into a second amended and restated credit agreement to Cole Operating Partnership IV, LP’s unsecured revolver on March 15, according to an 8-K filing with the Securities and Exchange Commission.

The second amended and restated credit agreement increases the allowable borrowings to up to $1.4 billion. It includes a $1.05 billion unsecured term loan and allows Cole Operating to borrow up to $350 million in unsecured revolving loans under a revolving credit facility.

Up to $50 million of the revolver may be used for letters of credit.

The facility may be increased up to a maximum of $1.75 billion, with each increase being no less than $25 million.

The term loan matures on March 15, 2022. The revolving facility matures on March 15, 2021 but may be extended to March 15, 2022.

As of March 15, there was $1.05 billion outstanding under the term loan and $62 million of outstanding revolving loans.

The revolving loans will bear interest at one-, two-, three- or six-month Libor plus an applicable rate based on the company's overall leverage ratio. The applicable rate ranges from 165 basis points to 225 bps. The unused fee ranges from 25 bps to 30 bps.

If Cole Operating obtains an investment-grade rating from either S&P or Moody’s Investors Service, the applicable rate decreases to Libor plus 100 bps to 145 bps, with a facility fee of 20 bps to 40 bps.

The term loan bears interest at rates consistent with the revolving loans. At closing, the rate associated with $811.7 million of the $1.05 billion outstanding was effectively fixed by existing interest rate swaps. Based on the leverage ratio in effect, the weighted average all-in rate for the swapped term loan was 3.164%.

JPMorgan Chase Bank, NA acted as the administrative agent and letter-of-credit issuer on the amended agreement with U.S. Bank NA and Wells Fargo Bank, NA as co-syndication agents; Regions Bank as documentation agent; and JPMorgan, U.S. Bank, Wells Fargo Securities, LLC and Capital One, NA, as lead arrangers.

The operating partnership of Cole Credit Property Trust IV, Inc. is based in Phoenix.

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