PREIT Closes $400 Million Unsecured Credit Facility

PHILADELPHIA-Pennsylvania Real Estate Investment Trust reports it has entered a new $400-million revolving credit facility that increases its available borrowing capacity, changes the terms from secured to unsecured, and reduces interest rate spreads.

Key facets of the new revolving loan facility include increasing the capacity to $400 million, with an accordion feature that brings the lending limit to $600 million; the initial term of the credit facility is for three years with PREIT having the right to exercise two, one-year options; amounts borrowed will bear interest at a rate of LIBOR plus a range of 150 to 205 basis points depending upon the company's leverage; and cap rates used to calculate Gross Asset Value are 6.5% for properties with sales per square foot of more than $500 and 7.5% for all other properties.

The company reports an initial borrowing of $192.5 million was used for repayment of the outstanding amounts under its previous 2010 Term Loans and Revolving Credit Facility. Wells Fargo Bank, N.A. was the lead arranger and administrative agent on the transaction.

“The execution of this transaction further validates our recent successes,” states Joseph F. Coradino, CEO of PREIT. “The new credit facility strengthens our balance sheet, reduces our borrowing costs and provides the company with flexibility for future capital needs.”