UDR Closes $400M Financing Package Through Fannie Mae

Denver-based multi-family REIT UDR Inc. has closed a $225 million secured loan that includes an option to borrow an additional $175 million. The 10-year credit facility was originated by PNC ARCS L.L.C., for repurchase by Fannie Mae. The $225 million consists of $70 million that carries a fixed rate of 5.85 percent and $155 million that carries a variable rate, currently set under two- and three-year LIBOR swaps at 4.35 percent. UDR has the option to fix all or a portion of the variable note at any time during the next five years. The current all-in blended rate of the $225 million of new debt is about 4.8 percent. This financing package replaces a $139 million facility maturing in April 2010 that carried a 6.09 percent coupon. The credit facility is collateralized with six geographically diverse properties, allows collateral substitutions and is non-recourse. The new facility matures in 2018, and UDR has five years to draw the additional $175 million of capacity. Thomas Toomey, UDR’s president & CEO, noted in a prepared statement that the REIT has secured about $690 million of new capital since the end of September. That amount derives from an equity offering of 8 million shares of common stock that raised $190 million, approximately $418 million raised through the new Fannie Mae facility and other agency financing, along with about $83 million in construction financing. UDR intends to repay its 2009 debt maturities of $396 million with a combination of cash, notes receivable and funds from this credit facility, without having to access its existing $600 million line of credit. Of its $547 million of debt coming due in 2010, $139 million will be extended to 2018 via this expanded facility, and the remaining $408 million will be paid from new financings, the rollover or extension of certain secured debt, draws on the REIT’s existing $600 million credit facility and potential asset sales.