NEW YORK – American Finance Trust Inc. announced on October 4, 2021, that the company would restate and resize the credit facility to $815 million from the previous $540 million.
This credit facility will mature in 4.5 years with a 6-month extension option. However, the profit margin is 15 points lower than the previous credit facility.
The accordion feature can increase the credit facility to $1.25 billion, increasing by $435 million from the previous restatement. This increase is still subject to additional lender commitments.
The CEO of American Finance Trust Inc., Michael Weil, described the beneficial aspects of expanding the company’s credit facility.
Weil states that the company’s portfolio of high-quality assets contributed to its ability to expand its credit facility on attractive terms.
The company also states that it replaced the previous facility to “take advantage of an active corporate syndication market.” More importantly, the company believes that this revised credit facility provides better terms and pricing for its customers.
Weil also described that this revised credit facility is part of the company’s deleveraging strategy. This transaction significantly improves its balance sheet, providing leeway to implement its acquisition and disposition strategies.
BMO Harris Bank will provide the credit facility, including two six-month extension options. The interest rate can range from 1.45% to 2.05%, depending on the leverage ratio.
Because of the company’s acceptable investment grade rating in the S&P and other rating agencies, American Finance Trust Inc. can make an irrevocable decision to switch to a credit rating-based pricing method.