Equity One plans to use part of the facility to fund part of the cash to be paid to IRT shareholders, to pay transaction costs, and to repay about $61.6 million in secured mortgage debt and $8 million in unsecured borrowings. Wells Fargo, the administrative agent and sole lead arranger of the deal, has arranged 14 more banks' participation in the facility.
It has an initial term of three years with a one-year extension option. The facility also has an "accordion feature," allowing the company to increase the commitment from $340 million to $400 million.
The initial pricing will be set at Libor plus 1%. Advances under the facility will equate to Libor plus 0.65% to 1.35%, depending on the credit ratings of Equity One's senior unsecured long-term indebtedness.
"Wells Fargo has been a dependable business partner for Equity One over the past few years and has assembled an outstanding group of banks on our behalf," Chaim Katzman, chairman and CEO of Equity One, says in a statement.
Howard Sipzner, the company's chief financial officer, added, "Together with [the] anticipated closing of the IRT merger and the associated confirmation of Equity One's post-merger investment grade ratings--BBB- by Standard & Poor's Ratings Services and Baa3 by Moody's Investors Service--this facility opens a new chapter for Equity One in terms of financial stability and flexibility."
The merger would form one of the biggest shopping center REITs in the Southeast, with a combined 181 properties and 18.7 million sf in 12 states.
Equity One acquires, renovates, develops and manages neighborhood shopping centers that are anchored by supermarket chains and other "necessity" retailers, such as drug stores or discount stores. The company's portfolio includes approximately 8.5 million sf in 88 properties mainly in Florida and Texas metropolitan areas.
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