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NEWTOWN SQUARE, PA-GMH Communities Trust has obtained a $250-million secured, revolving line of credit with Wachovia Bank. It has an initial term of six months with an interest rate of Libor plus 2%.
According to a GMH statement, it "provides for certain extension options." The military and student housing REIT's press release says an 8K will be filed with the SEC "that will provide additional disclosure regarding the material terms of the Wachovia facility."
A GMH spokeswoman tells GlobeSt.com the SEC form will be filed in 24 to 48 hours. She declined to disclose any additional detail.
In the statement, J. Patrick O'Grady, EVP and CFO, says, "the short-term nature of this facility makes sense for us right now in light of the ongoing special committee." As GlobeSt.com previously reported, a special committee is evaluating strategic options for the company, which include a total or partial sale.
In a Sept. 29 SEC filing, GMH reports it has appointed Bethesda, MD-based Reznick Group PC as its independent accounting firm, replacing Ernst & Young LLC, which resigned Sept. 1. With regard to the Reznick hiring, the spokeswoman says "they understand military housing and the REIT structure so it's a very good fit."
GMH used approximately $128 million in initial advance funds from the new facility to repay outstanding debt on the previous line of credit, according to the statement. It also says the new credit will fund the equity needed to acquire a student housing portfolio from Birmingham, AL-based Capstone Properties Inc., which is expected to close by Oct. 9. In a June 16 SEC filing, GMH reported it will acquire as many as 13 student housing properties in nearly as many states for an aggregate price of about $247 million.
GCT common stock ended yesterday's NYSE trading at $12.65 per share, down nearly 2.2% for the day. The 52-week low of $10.75 per share occurred April 13, down from a 52-week high of $17.10 per share March 1.
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