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Spirit Realty closes $1.62B unsecured credit facility

Spirit Realty Capital Inc. closed on a new $1.62 billion unsecured credit facility that can be further expanded to a total of $2.42 billion, subject to certain conditions.

The single-tenant net-lease real estate investment trust said the new facility consists of an $800 million unsecured revolving credit facility, a $420 million unsecured term loan and a $400 million unsecured term loan.

The revolver replaces the REIT's existing $800 million unsecured facility and is due in March 2023, with two six-month extension options. It comes with an accordion expansion feature that allows increasing the capacity to $1.2 billion.

Borrowings under the new facility bear interest at the London interbank offered rate plus 110 basis points, with a facility commitment fee of 25 basis points, for all-in drawn pricing of 135 basis points over Libor. Under the previous facility, the all-in drawn pricing was 150 basis points over Libor.

The company said 14 lenders participated in the facility, including JP Morgan Chase Bank NA as a joint book runner and administrative agent. Merrill Lynch Pierce Fenner & Smith Inc. was also a joint book runner and syndication agent. U.S. Bank NA, SunTrust Robinson Humphrey Inc., The Bank of Nova Scotia and Wells Fargo Securities LLC NA were the joint lead arrangers.

Regions Bank, Royal Bank of Canada, Fifth Third Bank, Mizuho Bank Ltd., Citizens Bank NA, Capital One NA, Morgan Stanley Senior Funding Inc. NA and Associated Bank NA were the managing agents.

The new $420 million unsecured term loan replaces the REIT's existing $420 million unsecured term loan and is due March 2024. Its capacity can be lifted to $620 million with the accordion expansion feature.

Borrowings under the new term loan bear interest at Libor plus 125 basis points, compared to pricing of 135 basis points over Libor under the previous facility.

Spirit Realty said 13 lenders participated in the term loan, including JP Morgan Chase Bank as a joint book runner and administrative agent and U.S. Bank as a joint book runner and syndication agent.

Regions Capital Markets, Royal Bank of Canada and Fifth Third Bank were the joint lead arrangers. Bank of America NA, SunTrust Bank, The Bank of Nova Scotia, Wells Fargo Bank NA, Mizuho Bank Ltd., Citizens Bank, Capital One and Associated Bank were the managing agents.

The new $400 million unsecured term loan, which is due March 2022, includes a delayed funding feature. Borrowings bear interest at Libor plus 125 basis points, and the company can boost the term loan's capacity to $600 million with the accordion expansion feature.

Spirit Realty said it expects to fully draw loan proceeds in May to retire the $402.5 million unsecured convertible senior notes due May 2019, which bear interest at 2.875%.

The company added that 13 lenders participated in the term loan, including Merrill Lynch as a joint book runner and administrative agent. SunTrust Robinson Humphrey was a joint book runner and syndication agent. Mizuho Bank, Citizens Bank and Capital One were the joint lead arrangers. JP Morgan Chase Bank, U.S. Bank, The Bank of Nova Scotia, Wells Fargo Bank, Regions Bank, Royal Bank of Canada, Fifth Third Bank and Associated Bank were the managing agents.

In conjunction with the new credit facility, Spirit Realty entered into a $400 million swap transaction that fixes Libor for five years at a rate of 2.816%, starting February.

The company said it will use the expanded facility to finance the long-term growth of its real estate portfolio and address its maturing convertible notes.