NEW YORK CITY—American Realty Capital Properties, the largest REIT in the net lease space, said Friday that its lenders had granted a waiver and amendment on its unsecured credit facility, while also giving the company an extension on reporting its third-quarter results. As part of the agreement with lenders, ARCP will permanently reduce its maximum debt level from $4.65 billion to $4.0 billion.

The lenders' waiver and extension allows ARCP to remain compliant with its borrowing obligations while its external auditors complete their review of the REIT's financial statements for the past two years. ARCP on Oct. 29 said it would no longer rely on its Q1 and Q2 statements after accounting irregularities were discovered, leading to the resignation of its then-CFO and chief accounting officer as well as a steep drop in its stock prices.

Until its revised 2013 and 2014 statements are filed with the SEC, ARCP is temporarily limited to a maximum of $3.6 billion outstanding under its unsecured credit facility. Currently the company has $3.2 billion outstanding on that facility. ARCP has also agreed to maintain a minimum unencumbered asset value of at least $10.5 billion, which currently totals approximately $13 billion.

“This lender consent, waiver and amendment extends ARCP's financial statement filing obligations to Jan. 5, 2015 and we are working very diligently to have them completed before that time,” says CEO David S. Kay. “The right-sizing of the line enables us to meet our liquidity needs now, as well as our future capital needs, while reducing our credit facility fees. We greatly appreciate the support of our lenders while we work through the items outlined in our Oct. 29 filings. We also want to thank our stakeholders for their continued patience as we work to resolve this matter.”

In response to ARCP's announcement, Standard & Poor's on Friday reaffirmed that ARCP remains on CreditWatch negative pending the completion of the auditor review. The ratings agency had placed the REIT on the watch list following the Oct. 29 resignation of CFO Brian Block.

“Today's update follows the recent announcement that the company's bank lending group agreed to waive certain potential technical defaults under the credit agreement,” says credit analyst Jaime Gitler. “The technical defaults could have been triggered because the company will not meet requirements for timely filing of third-quarter financial statements.” S&P says it will meet with ARCP's senior management within the next few weeks and expects to resolve the CreditWatch placement within the next 90 days.