PHILADELPHIA-ElderTrust, an equity healthcare REIT, has entered into a new bank credit facility with Wachovia Bank. About $3.1 million was available when the deal closed recently to pay off the Kennett Square, PA-based company’s prior bank credit facility provided by German American Capital Corp., an affiliate of Deutsche Bank, and transaction costs.
Other significant terms of the new credit facility from Wachovia Bank are an 18-month term; recourse loan secured by all properties not otherwise secured by other loans; borrowings up to $7.5 million in the aggregate upon lender approval; quarterly principal payments of $500,000; interest calculated at 325 basis points over LIBOR or an alternate rate of Wachovia Bank prime plus 0.5% at borrower’s election; and distributions to shareholders limited to 90% of funds from operations.
The deal will give ElderTrust more flexibility in improving its capital structure, says D. Lee McCreary, Jr., ElderTrust’s president and chief executive officer.
ElderTrust invests in real estate properties used in the healthcare services industry, principally along the East Coast, and has interests in 32 properties.