NorthStar Realty Europe Corp., or NRE, along with NorthStar Realty Europe Limited Partnership, amended and restated its senior secured revolving credit facility, originally dated May 10, 2016.
A total of $35 million worth of lender commitments was secured with the new deal, which may be increased up to an aggregate amount of $70 million based on an uncommitted accordion feature. The new facility has an initial term of two years with one-year extension option.
Eurocurrency loans under the facility will have an annual interest rate equal to LIBOR plus a margin of 2.75%, provided the margin increases by 2.00% during an event of default.
Proceeds from the loan facility are likely to be used for general corporate and working capital purposes.
The revised agreement also removes the limitation on availability based on a borrowing base, as well as provides that the full amount of lender commitments may be drawn as per compliance with customary covenants.
The new agreement also provides for a letter of credit facility where up to $15 million of the loan facility will be made available for the issuance of standby letters of credit with Bank of America being the issuing bank; as well as swing line loans, also funded by Bank of America, of up to $15 million. Loans and letters of credit under the loan facility will be available in U.S. dollars, euros, pounds sterling and Swiss francs, while swing line loans will be made available in U.S. dollars only.
Obligations by the limited partnership are guaranteed by NRE and some of its subsidiaries and secured by pledges of equity and intercompany receivables also from some subsidiaries of NRE.
Unused commitments will have a penalty at a rate of 0.50% annually if the facility usage falls below 50% or 0.35% per year if the facility usage is at least 50%.
Merrill Lynch Pierce Fenner & Smith Inc. was the sole lead arranger and bookrunner, while Bank of America NA was the administrative agent and lender.