Boston-based Fleet Securities is the lead arranger and Fleet National Bank is administrative agent. Both are subsidiaries of FleetBoston Financial Services. Kramont made an initial borrowing of $67.988 million from the credit facility to refinance $56.8 million in a current mortgage from Horsham, PA-based GMAC Commercial Mortgage Corp.
The loan would have matured this August. The refinancing lowers the blended interest rate from LIBOR plus 270 basis points with GMAC to a LIBOR plus a maximum of 225 basis points with Fleet.
Additionally, Krammont refinances $4.3 million of maturing debt at its Northpark Center in Macon, GA.
The credit facility is initially secured by first mortgages on 16 shoppingcenters in nine states. The maximum amount of the facility may be increased to $125 million under the terms and conditions of the loan. The interest rate is one month LIBOR plus a minimum of 175 basis points up to a maximum of 225 points, depending on corporate leverage.
"The Fleet financing enables us to eliminate any significant scheduled debt maturities until 2006," says Louis P. Meshon Sr., Kramont's president and chief executive officer in a statement. Combined with another loan from MetLife in October 2002, Meshon says, "We will have proactively refinanced a major portion of our portfolio and taken advantage of significantly lower interest rates."
Meanwhile, Kramont agreed to sell 1.81 million common shares to New York-based Teachers Insurance and Annuity Association of America and certain advisory clients of Teachers Advisors Inc. and Orinda, CA-based Kensington Investment Group Inc. An additional 280,000 shares areexpected to close today.
Shares were priced at $14.35, bringing the aggregate purchase price to $30 million. Kramont's net proceeds are estimated at $29.45 millionand will be used for general corporate purposes, according to a statement.
Cohen & Steers Capital Advisors LLC was the placement agent for thetransaction.
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