Post Properties Inc., an Atlanta-based real estate investment trust, has prepaid six multi-family mortgage loans held by Freddie Mac and will record a $7 million loss on the transaction.
The loans totaled nearly $185 million, with fixed interest-only payments at 6.09%, and would have matured on Nov. 1, 2014.
There was a $6.2 million prepayment premium on the notes that is counted as part of the loss, plus the write off of related unamortized deferred financing costs.
Post used a draw of $135 million from its $300 million unsecured revolving line of credit plus available cash to make the prepayment. The LOC's interest rate is Libor plus 230 basis points. The REIT is looking to refinance the amount drawn through an unsecured long-term bank loan during the first quarter of 2012.
Chris Papa, executive vice president and chief financial officer, said, “The prepayment of these notes and our anticipated unsecured long-term bank financing in the first quarter of 2012 is consistent with our strategy of reducing secured debt levels and borrowing costs over time and refinancing our near term debt maturities. In that regard, we were pleased that Moody's Investors Service last week affirmed the company's senior unsecured credit rating of Baa3, and revised the company's outlook to positive from stable, reflecting the improvements that the company has made to its credit profile.”
