First Industrial Realty Closes $200M Refi of Unsecured Term Loan

The refinancing, scheduled to mature in late January, would give the company financial flexibility during the COVID-19 crisis.
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Saying it wanted more flexibility to manage its business through the pandemic, First Industrial Realty Trust, a Chicago-based REIT that owns, operates and develops industrial real estate, has refinanced a $200 million unsecured loan scheduled to mature in late January.

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The new loan has an initial maturity date of July 15, 2021 with options for two one-year extensions at the company’s discretion and subject to certain conditions. The new loan features interest-only payments and now bears an interest rate of LIBOR plus 150 basis points. The rate can be adjusted based on the company’s credit ratings. First Industrial also entered into new interest swap agreements that convert the loan to a fixed-interest rate of 2.49 percent beginning February 2021.

CFO Scott Musil said in a prepared statement the transaction extends the company’s maturities and improves its financial flexibility, as the economy recovers from the COVD-19 crisis.

Wells Fargo Securities LLC and PNC Capital Markets LLC were the joint lead arrangers and joint book runners for the $200 million unsecured term loan facility. Wells Fargo Bank, National Association served as the administrative agent and PNC Bank, National Association was the syndication agent. Regions Bank, Fifth Third Bank and U.S. Bank National Association also participated in the new term loan facility.

Private placement offering

The loan refinancing came one week after First Industrial announced it would be issuing $300 million of fixed-rate senior unsecured notes in a private placement offering, with a weighted average interest of 2.81 percent. The company expects to close the offering on or about Sept. 17. The notes are divided into two tranches—$100 million of 2.74 percent Series F guaranteed senior notes with a 10-year term and $200 million of 2.84 percent of Series G guaranteed senior notes with a 12-year term. The proceeds will be used for general corporate purposes including repaying debt on its unsecured line of credit and new investment. Musil said in prepared remarks the $300 million private placement will further lower the REIT’s borrowing costs and extend and ladder its maturities.

More company moves

In May, the REIT was among several industrial companies including Prologis and Duke Realty stating they were holding off on speculative developments during the pandemic. First Industrial also reduced its 2020 guidance to reflect a reserve for potential tenant defaults and slightly lower occupancy, Peter Baccile, president & CEO, said in a news release in late April discussing the company’s first-quarter 2020 results. At that time, Baccile said First Industrial’s “strong balance sheet, quality portfolio and dedicated team” would help the company perform and serve its customers during the crisis. The company also noted in the first-quarter earnings report it had acquired several properties including Nottingham Ridge Logistics Center, a 751,000-square-foot two-building development in Baltimore with an expected total investment of $82 million; First Park Miami, a 63-acre infill site for $48.9 million; a 23,000-square-foot building in Northern California’s East Bay market; as well as land and a building for redevelopment in Southern California for $21.3 million. In November, the company acquired 770 Gills Drive, a 54,000-square-foot, Class A industrial property in Orlando, Fla., for $6.3 million.