The new facility matures in January 2013 with an additional one-year extension option. The interest rate increased from a range of LIBOR plus 80 to 130 basis points to a range of LIBOR plus 275 to 375 basis points--a variation that depends on the company's overall leverage. First Potomac expects the initial rate to be LIBOR plus 325 basis points. There will also be a LIBOR floor of 1% for any amounts that had not previously been hedged.
This transaction addresses a significant portion of the REIT's 2011 debt maturities, according to the company, as well as providing it with more flexibility to make additional acquisitions if it wants.
Last October, First Potomac Realty Trust acquired a locally-based, 173,655-square-foot business park, using a combination of the cash it has on hand plus five-year debt, for $26 million.
The REIT has also been focusing on keeping vacancies to a minimum throughout its multi-state portfolio. Last year it began pushing tenants to proactively close leases ahead of upcoming expirations--a strategy that has paid off for the firm, according to comments made by CEO Doug Donatelli in an earnings call last year.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
