Easterly Government Properties, Inc. has announced the amendment of its 2016 senior unsecured term loan agreement, resulting in significant changes to its borrowing capacity and maturity date. The company has increased its term loan borrowing capacity by $100 million, bringing it to a total of $250 million through the accordion feature. Additionally, the maturity date of the amended loan has been extended from January 30, 2025, to January 28, 2028, with the option to further extend it to January 28, 2030, subject to certain conditions.
In connection with the amended loan, Easterly Government Properties, Inc. has entered into an interest rate swap to effectively fix SOFR at 3.8569% annually, providing greater certainty over its interest rate exposure. The borrowings under the amended loan will bear interest at a rate of SOFR, a credit spread adjustment of 0.10%, plus a spread of 1.20% to 1.70%, depending on the company's leverage ratio. Given the current leverage ratio, the initial spread to SOFR is set at 1.35%.
The company's Chief Financial and Chief Accounting Officer, Allison Marino, expressed satisfaction with the favorable terms of the amended 2016 term loan, highlighting the extension of liabilities' duration while maintaining a strong balance sheet and long-term debt capacity.
The transaction was facilitated by PNC Capital Markets LLC, U.S. Bank National Association, and Truist Securities, Inc., serving as joint lead arrangers and joint bookrunners, with PNC Bank, National Association acting as the administrative agent.
Easterly Government Properties, Inc. is a real estate investment trust focused on the acquisition, development, and management of class A commercial properties leased to the U.S. government and its adjacent partners. The company aims to remain the partner of choice to the United States government, leveraging its specialized insight into the strategy and needs of mission-critical U.S. government agencies for properties leased to such agencies directly or through the U.S. General Services Administration (GSA). Today the company's shares have moved 0.8% to a price of $11.4. For the full picture, make sure to review Easterly Government Properties's 8-K report.
