American Realty Capital Closes $235M Secured Loan
- Jul 06, 2012
Lenders are looking favorably on some real estate companies, and American Realty Capital Trust Inc. is one of them. The company recently closed a $235 million senior secured loan through Wells Fargo Securities L.L.C.
Wells Fargo acted as the sole lead arranger on the transaction, which provided ARCT with a senior secured loan featuring a five-year term and bearing an interest rate of LIBOR plus 235 basis points. Also onboard as documentation agents were Union Bank and TD Bank. And US Bank, BB&T, Midfirst Bank and Raymond James rounded out the consortium. Completion of the transaction has, ARCT CFO Brian D. Jones said, “strengthened and broadened our banking relationships.”
The fact that so many banks were willing to participate in the deal dovetails with the forecast for the 2012 capital markets. “Even with the existing global economic concerns, debt financing will remain very strong in the core space from life companies and domestic banks,” Tom Fish, co-head and executive managing director of commercial real estate services firm Jones Lang LaSalle’s real estate investment banking business, noted in a report earlier this year.
Wells Fargo has come through for ARCT in the past, having previously provided a $200 million interim loan, which will be replaced by the new financing. ARCT will utilize a portion of the proceeds for general working capital purposes, and rely on the remaining funds to repay outstanding balances on its $330 million revolving line of credit.
“This financing completes the mortgage debt recapitalization strategy commenced by ARCT in April, resulting in a reduction in borrowing costs, an increase in the unencumbered asset pool, and an improvement in the average duration of the Company’s long-term debt,” said Jones.