Franklin Street Properties Corp. (the “Company”, “FSP”, “our” or
“we”) (NYSE American: FSP) announced today that it has successfully
entered into the following the transactions:
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the full release here:
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Recast of Existing Unsecured Credit
Facility into $1 Billion Facility
On October 18, 2017, the Company recast its existing credit
facility (as amended, the “BAML Credit Facility”) with Bank of
America, N.A. (“BAML”) continuing to serve as Administrative Agent.
A summary of key terms is below:
- Total availability under the revolving
line of credit was increased from $500 million to $600
million.
- Principal amount of the term loan
remained unchanged at $400 million.
- Maturity date applicable to the
revolving line of credit was extended from October 29, 2018 to
January 12, 2022, plus two optional six-month extensions.
- Maturity date applicable to the term
loan was extended from September 27, 2021 to January 12, 2023.
- Accordion feature that allows for
additional borrowing capacity under the revolving line of credit or
the term loan was expanded from up to $350 million to up to $500
million.
- Depending on the Company’s credit
rating, the margin over LIBOR applicable to borrowings under the
revolving line of credit decreased from a range of 0.875%-1.650% to
a range of 0.825%-1.550%. The margin over base rate applicable to
borrowings under the revolving line of credit also decreased from a
range of 0.000%-0.650% to a range of 0.000%-0.550%. Based on the
Company’s credit rating of Baa3 with Moody’s as of October 24,
2017, our margin over LIBOR decreased from 1.25% to 1.20%.
- Depending on the Company’s credit
rating, the margin over LIBOR applicable to the term loan decreased
from a range of 0.950%-1.900% to a range of 0.900%-1.750%. The
Company previously entered into interest rate swap agreements that
fixed the base LIBOR rate applicable to the term loan at 1.12% per
annum for the period beginning on September 27, 2017 and ending on
September 27, 2021. The margin over base rate applicable to
borrowings under the term loan also decreased from a range of
0.000%-0.900% to a range of 0.000%-0.750%. Based on the Company’s
credit rating of Baa3 with Moody’s as of October 24, 2017, our
margin over LIBOR decreased from 1.45% to 1.35%.
- Modified certain financial covenants,
including a reset of minimum tangible net worth.
On October 18, 2017, the Company also amended its existing term
loan with Bank of Montreal as Administrative Agent and its existing
term loan with JPMorgan Chase Bank, N.A. as Administrative Agent to
conform the financial covenants and certain other provisions to the
BAML Credit Facility.
FSP was represented by Wilmer Cutler Pickering Hale and Dorr LLP
and BAML was represented by Goulston & Storrs PC. Participating
banks include:
Name of
Institution
Title
Bank of America, N.A.
Administrative Agent
Bank of Montreal
Syndication Agent
JPMorgan Chase Bank, N.A.
Syndication Agent
Citizens Bank, National Association
Documentation Agent
Regions Bank
Documentation Agent
U.S. Bank National Association
Managing Agent
PNC Bank, National Association
Lender
TD Bank, N.A.
Lender
BBVA Compass
Lender
Branch Banking and Trust Company
Lender
Capital One, N.A.
Lender
Private Placement of $200 Million
Senior Unsecured Notes
On October 24, 2017, the Company entered into a note purchase
agreement with respect to the private placement of $200 million
aggregate principal amount of unsecured senior notes (the “Private
Placement”). The Private Placement consists of $116 million in
aggregate principal amount of Series A Senior Notes with a 7-year
maturity at an annual rate of interest of 3.99% and $84 million in
aggregate principal amount of Series B Senior Notes with a 10-year
maturity at an annual rate of interest of 4.26%. The notes have not
been registered under the Securities Act of 1933 (as amended, the
“Securities Act”) and are being offered and sold in reliance on an
exemption from registration provided by Section 4(a)(2) of the
Securities Act. The Company intends to use the proceeds from the
Private Placement to reduce the outstanding balance of the
revolving line of credit portion of the BAML Credit Facility.
George J. Carter, Chairman and Chief Executive Officer of FSP,
said, “We believe that these debt transactions help to better align
the risk/reward characteristics of our capital structure with the
long-term, value-add growth opportunities that we believe exist in
our now predominantly urban and infill office property portfolio.
We appreciate the confidence shown in FSP by each of the
participating banks and note purchasers.”
The Company’s pro forma debt maturity schedule as of December
31, 2017, adjusted for the close of the debt transactions and
application of the proceeds thereof, is shown below:
http://mms.businesswire.com/media/newsItemId/en/620543/4/new.jpg
The table below illustrates the impact of these transactions by
comparing certain estimated figures of the Company as of September
30, 2017 to pro forma estimates of those same figures as of
December 31, 2017, adjusted for the close of the transactions and
application of the proceeds thereof:
PRO FORMA IMPACT OF
TRANSACTIONS(1)
As of September
30, 2017
As of December
31, 2017
Total Indebtedness
$1,070b
$1,045b
Total Liquidity
$200mm
$525mm
Weighted Average Debt Maturity
2.4 years
4.5 years
Weighted Average Interest Rate
2.86%
3.12%
% of Fixed Rate Indebtedness
58%
78%
% of Floating Rate Indebtedness
42%
22%
_________________________
(1) Estimates are based on the pro forma debt maturity schedule
that appears on page 3 of this press release.
This press release, along with other news about FSP, is
available on the Internet at www.fspreit.com. We routinely post
information that may be important to investors in the Investor
Relations section of our website. We encourage investors to consult
that section of our website regularly for important information
about us and, if they are interested in automatically receiving
news and information as soon as it is posted, to sign up for E-mail
Alerts.
About Franklin Street Properties Corp.
Franklin Street Properties Corp., based in Wakefield,
Massachusetts, is focused on investing in institutional-quality
office properties in the U.S. FSP’s strategy is to invest in select
urban infill and central business district (CBD) properties, with
primary emphasis on our five core markets of Atlanta, Dallas,
Denver, Houston, and Minneapolis. FSP seeks value-oriented
investments with an eye towards long-term growth and appreciation,
as well as current income. FSP is a Maryland corporation that
operates in a manner intended to qualify as a real estate
investment trust (REIT) for federal income tax purposes. To learn
more about FSP please visit our website at www.fspreit.com.
Forward-Looking Statements
Statements made in this press release that state FSP’s or
management’s intentions, beliefs, expectations, or predictions for
the future may be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. This press
release may also contain forward-looking statements based on
current judgments and current knowledge of management, which are
subject to certain risks, trends and uncertainties that could cause
actual results to differ materially from those indicated in such
forward-looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward-looking statements. Investors
are cautioned that our forward-looking statements involve risks and
uncertainty, including without limitation, economic conditions in
the United States, disruptions in the debt markets, economic
conditions in the markets in which we own properties, risks of a
lessening of demand for the types of real estate owned by us,
changes in government regulations and regulatory uncertainty,
uncertainty about governmental fiscal policy, geopolitical events
and expenditures that cannot be anticipated such as utility rate
and usage increases, unanticipated repairs, additional staffing,
insurance increases and real estate tax valuation reassessments.
See the “Risk Factors” set forth in Part I, Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2016, as the
same may be updated from time to time in subsequent filings with
the United States Securities and Exchange Commission. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, acquisitions, dispositions, performance or
achievements. We will not update any of the forward-looking
statements after the date of this press release to conform them to
actual results or to changes in our expectations that occur after
such date, other than as required by law.
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