ARCP Upsizes Line of Credit

NEW YORK CITY-American Realty Capital Properties said Friday that it had bumped up its credit facility to $2.87 billion. The net lease REIT says the financing will position it to complete its previously announced acquisitions and fund its organic growth.

The new commitments from lenders also entailed fixing the interest rate on ARCP's secured acquisition financing, thereby obtaining low-cost property-level debt with an average duration of 9.7 years at a weighted average coupon of 4.70%. “We are gratified to have received resounding support from our lenders who have pledged over $1 billion of new commitments to our credit facility,” says David S. Kay, president of ARCP.  “Our balance sheet strength will enable us to maintain and secure our position as the dominant net lease REIT.”

ARCP's CEO, Brian S. Block, says the financings fit in with the REIT's commitment to “maintain a very competitive cost of capital, eliminate floating rate debt exposure and de-risk our balance sheet.” He adds that the new fixed rate mortgage debt, along with $287.5 million of five year convertible notes at 3.00% and $402.5 million of seven year convertible notes at 3.75%, “provide for an expected $1.44 billion of fixed rate debt with a weighted average coupon of 4.10% and average term of 8.0 years to help fund, in part, our pending acquisitions and further extend our debt maturities.”

In October, GlobeSt.com reported that ARCP and Cole Real Estate Investments would merge in a transaction valued at $11 billion, adding to the pending acquisitions of CapLease and American Realty Capital Trust IV. When finalized, the three mergers will result in a net lease REIT with an enterprise value of $21 billion, 64% larger than its next nearest competitor and the 14th largest publicly traded REIT.