Agree Realty Expands Credit Facility, Fortifies Balance Sheet
Zacks Investment Research | Dec 10, 2019 08:46PM ET
Agree Realty Corporation (NYSE:ADC) recently fortified its balance sheet by amending and restating the company’s revolving credit and term loan agreement to increase the senior unsecured credit facility to $600 million. The move will also enable the company to extend the maturity of the revolving facility.
The credit facility comprises a $500-million unsecured revolving line of credit due in January 2024 that can be extended by a year by exercising an option. The credit facility also consists of two unsecured term loans worth $65 million and $35 million, respectively. It will mature in January 2024. There is also an accordion option in the credit agreement for increasing the credit facility capacity by up to a total of $1.1 billion.
For the revolving line of credit, pricing will range from an interest rate of LIBOR + 77.5 to 145 basis points (bps). For the term loan, pricing will range from an interest rate of LIBOR + 85 to 165 bps. Both ranges will depend on the company's credit rating.
Based on the company's leverage ratio and credit rating at the time of closing, the revolving facility was priced at LIBOR+ 82.5 bps, while interest rate on unsecured term loans was 3.13%. Agree Realty intends to utilize existing interest rate swaps to fix LIBOR on the term loans at around 2.13%.
The credit facility expansion is a strategic fit as it provides ample growth opportunities. Moreover, extended maturities of the assumed debt will help improve its maturity profile and enjoy greater liquidity for day-to-day operations. The recast will also enable the company to make accretive investments in high-quality retail net lease properties.
Recently, the company also announced a 2.6% sequential hike in quarterly cash dividend. It will now pay a dividend of 58.50 cents per share, up from the 57 cents paid in the prior quarter. The increased dividend will be paid on Jan 3, 2020, to shareholders of record as on Dec 20, 2019.
In the past six months, shares of this Zacks Rank #2 (Buy) company have gained 7.8% compared with the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.