Commercial real estate finance company iStar Financial, New York, has obtained a $1.82 billion senior secured credit facility, which company executives said will allow it to refinance the balances of its 2011 secured credit facilities and to help address its unsecured
The line of credit has a variable rate tied to Libor plus 450 basis points; the floor is 1.25% and it was issued at 99% of par. This facility is due on Oct. 15, 2017.
The 2011 borrowings were in the form of two separate loans and consisted of a $1.5 billion A-1 tranche due on June 28, 2013 and a $1.45 billion A-2 tranche due on June 30, 2014. The A-1 tranche has an interest rate of Libor plus 3.75%, while the A-2 is at Libor plus 5.75%.
"With this transaction, we have extended various secured debt maturities to 2017 and unencumbered certain liquid assets. This new financing, together with anticipated available cash, gives us additional flexibility to address our 2013 unsecured debt maturities," said Jay Sugarman, iStar's chairman and chief executive. "This financing improves our debt maturity profile and puts iStar on stronger footing, creating a five-year window for us to focus on creating value in our existing platforms."
Outstanding borrowings under the new financing will be collateralized by a first lien on a fixed pool of approximately $2.29 billion of assets.
JPMorgan and Barclays acted as joint physical bookrunners and, together with B of A Merrill Lynch, served as joint lead arrangers and bookrunners. iStar is structured as a real estate investment trust.
