PHOENIX-The operating partnership of Cole Credit Property Trust III Inc. has entered into a $700 million senior unsecured credit facility.
The facility, which replaces an existing $100 million revolving credit agreement, includes a $200 million term loan and a $500 million revolving line of credit. It may be increased up to a maximum of $950 million.
“In any business, it’s best to have diverse sources of financing and not put all of your financing needs in one basket,” says Mitchell Sabshon, executive vice president and chief operating officer of Cole. “We want to be flexible if one particular source of financing is more attractive than another. The credit facility gives us another tool in our shed.”
Bank of America NA and JP Mortgage Chase Bank co-led the facility. US Bank National Association, Wells Fargo Bank NA and Regions Bank also participated in the facility as co-documentation agents.
Sabshon tells GlobeSt.com that Cole Credit Property Trust II obtained a credit facility in late 2010 that was also led by Bank of America and JP Morgan Chase Bank. “When we decided to upsize our facility for CCPT III, we wanted to move quickly, and we thought it made sense to go with the same lead banks because of the similarity of documentation and the familiarity the teams have with one another,” he explains, pointing out that Cole was able to syndicate and close CCPT III’s facility in less than 60 days, with 15 of the leading US lenders.
The interest rate for the credit facility ranges from 2.25% to 3.0% over LIBOR, subject to the Cole REIT III leverage ratio. It matures in June 2014.
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