Equity Residential Secures New $2.5B Credit Line, $750M Term Loan
Equity Residential (NYSE: EQR) today announced that the company has entered into a new unsecured revolving credit facility and term loan as it positions itself for the closing of the Archstone acquisition in the first quarter of 2013.
“We are very pleased to put these new facilities in place and are appreciative of the support that we have received from a syndicate of 25 financial institutions for both the revolver and the term loan,” said Mark J. Parrell, Equity Residential's Executive Vice President and CFO. “Between these loans and the proceeds from the more than $3.0 billion of non-core assets we have recently sold or have under contract, we have exceeded our funding objectives for the Archstone closing.”
On January 11, 2013, the company entered into a new $2.5 billion unsecured revolving credit agreement with a group of 25 financial institutions. The new facility matures in April 2018 and has an interest rate of LIBOR plus a spread and an annual facility fee that are dependent on the company's then current credit rating. At the company's current rating, the interest rate spread is 1.05% and the annual facility fee is 15 basis points. This facility replaced the company's existing $1.75 billion facility which was scheduled to mature in July 2014.
Also on January 11, 2013, the company entered into a new senior unsecured $750 million delayed draw term loan facility with an interest rate of LIBOR plus a spread which is dependent on the company's then current credit rating. At the company's current rating, the interest rate spread is 1.20%. The maturity date of the facility is January 11, 2015, subject to a one year extension option exercisable by the company. The facility is currently undrawn and is available in one draw made on or before July 11, 2013 and may be used to fund the Archstone acquisition or for other corporate purposes.
With the completion of these financing activities, the company terminated the $2.5 billion bridge loan facility commitment that it obtained contemporaneously with entering into the Archstone acquisition contract in November 2012.
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