Boston Properties Defeases Loan on Former Hancock Tower

BOSTON—Boston Properties has spent $667.4 million to retire the outstanding mortgage debt on the former John Hancock Tower here on Clarendon Street.

The REIT defeased the mortgage loan of $640.5 million, which bore a fixed interest rate of 5.68%. The mortgage was scheduled to mature on Jan. 6, 2017. The $667.4-million required to pay off the loan early for the financing secured by 100 and 200 Clarendon St. was based on the purchase price of U.S. government securities that will generate sufficient cash flow to fund continued interest payments on the loan from the effective date of the defeasance through, and the repayment of the loan on, Oct. 6, 2016, which is the date the company could repay the loan at par. In connection with the defeasance, the mortgage and other liens on the property were extinguished and all existing collateral, including various guarantees, were released, the company states. The adjoining parking garage to the property was also part of the mortgage financing.