W.P. Carey Closes Merger with Affiliate REIT, Gets New $1.2B Credit Facility
- Feb 04, 2014
W.P. Carey Inc., of New York, last Friday closed the merger with its publicly held, non-traded REIT affiliate, Corporate Property Associates 16 – Global Inc., the company announced yesterday.
W.P. Carey issued approximately 30.7 million shares to CPA:16 – Global stockholders, at an exchange rate of 0.1830 shares of W.P. Carey common stock for each CPA:16 – Global share held at closing.
The company also announced that it has obtained a $1.25 billion senior unsecured credit facility consisting of a $1.0 billion revolving line of credit and a $250 million term loan, as well as a $500 million accordion feature.
With the merger, Carey’s portfolio totals 734 properties, 231 tenants and 86 million square feet in 10 countries. The combined portfolio reportedly consists of 30.2 percent industrial, 23.3 percent office, 18.4 percent warehouse/distribution, 13.3 percent retail, 4.5 percent self-storage and 10.4 percent other (including health care, nursing homes and hospitality). The company now has an equity market capitalization of about $5.9 billion and a total market capitalization of about $9.6 billion.
“We believe that the positive balance sheet, earnings and AFFO impact of the merger with CPA:16 – Global, along with the additional liquidity provided by the increased size of our credit facility, will continue to support W.P. Carey’s position as the leading global net lease REIT,” Trevor Bond, the company’s president/CEO, said in a release.
Among the expected benefits of the merger, highlighted in a conference call shortly after the merger was announced last July, was “Enhanced access to diverse, efficiently priced sources of capital.”
Whether that has come to fruition, or would have happened absent the merger, the new $1 billion revolving line of credit will mature in four years with an option to extend for one year. The $250 million term loan component has a two-year maturity with two separate one-year extension options.
Bank of America N.A. and JPMorgan Chase Bank N.A. acted as joint bookrunners and joint lead arrangers.
Overall, the new credit facility has a lower aggregate interest rate than what W.P. Carey and CPA:16 – Global paid in aggregate on their respective facilities. The company repaid the $595 million of principal outstanding on its $625 million credit facility as well as $170 million of principal that CPA:16 – Global had outstanding on its credit facility. Each of those prior facilities has been terminated, and the company expects to use the new facility primarily for “potential new investments and general corporate purposes,” according to the release.