Federal Realty gets replacement $1.25 billion revolving facility

By Mary-Katherine Stinson

Lexington, Ky., Oct. 11 – Federal Realty OP LP entered a second amended and restated credit agreement on Oct. 5 providing a $1.25 billion revolving credit facility maturing April 5, 2027 subject to two six-month extensions at the partnership’s option, according to an 8-K filing with the Securities and Exchange Commission.

Under an accordion feature, the partnership has the option to expand the borrowing capacity up to $1.75 billion.

The new credit agreement bears interest at SOFR plus a 10 basis points credit spread adjustment and then a margin from 70 bps to 140 bps. Initially, the applicable margin for SOFR loans will be 77.5 bps.

There is an option to amend the agreement to establish key performance indicators with respect to certain environmental, social and governance targets of the partnership and its subsidiaries or to establish external ESG ratings targets. As a result, if amended and the targets achieved, the applicable margin and/or letter-of-credit fee could be reduced by up to 4 bps, and/or the applicable facility fee could be reduced by up to 1 bps.

Wells Fargo Bank, NA, is the administrative agent.

PNC Bank, NA is the syndication agent.

Wells Fargo Securities, LLC, PNC Capital Markets LLC and JPMorgan Chase Bank, NA are the joint bookrunners.

Wells Fargo Securities, LLC, PNC Capital Markets LLC, U.S. Bank NA, Truist Securities, Inc., Regions Capital Markets, TD Securities (USA) LLC and JPMorgan Chase Bank, NA are the joint lead arrangers.

U.S. Bank NA, Truist Bank, TD Bank, NA, Regions Bank and JPMorgan Chase Bank, NA are the documentation agents.

PNC Capital Markets LLC is acting as the sustainability structuring agent.

The new credit agreement replaces the amended and restated credit agreement dated as of July 25, 2019 consisting of a $1 billion revolving credit facility with a maturity date of Jan. 19, 2024.

Also on Oct. 5, the partnership entered into the third amendment to its term loan agreement, dated May 6, 2020 with PNC Bank, NA, as administrative agent to borrow an additional $300 million under the term loan agreement.

The principal amount outstanding under the term loan agreement is now $600 million.

As amended, there is not a further accordion feature.

The amendment also changed the interest rate to make it similar to the new credit agreement.

The applicable margins under the term loan agreement range from 75 bps to 165 bps for SOFR loans.

As of Oct. 5, the outstanding principal bears interest at approximately 4.05%.

The maturity date is unchanged and remains April 16, 2024 with two optional extensions of 12 months.

JPMorgan Chase Bank, NA, Sumitomo Mitsui Banking Corp. and Associated Bank, NA are listed as new lenders on the term loan agreement.

The real estate investment trust for retail and mixed-use buildings is based in North Bethesda, Md.

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