Home Properties Announces $275 Million Unsecured Credit Facility and $250 Million Term Loan

Published on Monday, 12 December 2011 10:39 Written by TradersHuddle Staff

ROCHESTER, N.Y., Dec. 12, 2011 /PRNewswire/ -- Home Properties, Inc. (NYSE: HME) today announced that, on December 9, 2011, it entered into an amended and restated unsecured revolving line of credit agreement for $275 million and a new $250 million five-year unsecured term loan.  The $275 million line of credit replaced the Company's prior $175 million facility.  The line of credit facility is for an initial four-year term, and it may be extended at the Company's option for an additional one-year period.

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"We were very pleased with the high level of interest in participating in the new credit facility and term loan," said David P. Gardner, Home Properties Executive Vice President and Chief Financial Officer.  "Due to the strong response, we were able to lengthen the term of the prior line of credit and increase the size of both loans from our original expectations, at favorable pricing.  Proceeds will provide additional liquidity and financial flexibility for our business needs with less reliance on secured debt, further strengthening our credit profile."

Borrowing rates under the credit facility float at a margin over LIBOR plus a facility fee, both of which are priced off a grid that is tied to the Company's overall leverage ratio.  Based on the Company's current leverage ratio, the LIBOR margin is 1.3% (compared to 2.1% in the previous facility), and the annual facility fee is 0.25%.  There are no material changes to the financial covenants from the previous facility.

The unsecured five-year term loan also is priced at 1.3% over LIBOR, and its covenants align with those of the new revolving credit facility.

Proceeds from the unsecured debt were used, in part, to pay down the line of credit and pay off the $140 million 4.125% Exchangeable Senior Notes.  Proceeds also will be used to fund unencumbered acquisitions, repay secured indebtedness, upgrade owned properties and for new development activities.

Manufacturers and Traders Trust Company and U.S. Bank National Association are the Joint Lead Arrangers and Joint Bookrunners.  Manufacturers and Traders Trust Company will continue to act as Administrative Agent.  There are nine additional lenders:  Bank of America, N.A., PNC Bank, N.A., RBS Citizens, N.A., Capital One, N.A., JPMorgan Chase Bank, N.A., Royal Bank of Canada, First Niagara Bank, N.A., Branch Banking and Trust Company and Wells Fargo Bank, National Association.  Bank of America, N.A., PNC Bank, N.A. and RBS Citizens, N.A. serve as Co-Documentation Agents.  U.S. Bank National Association is Syndication Agent.  Of the eight lenders that participated in the prior facility, seven are continuing their participation in the new debt.

This release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved.  Factors that may cause actual results to differ include general economic and local real estate conditions, weather and other conditions that might affect operating expenses, the timely completion of repositioning and new development activities within anticipated budgets, the actual pace of future acquisitions and dispositions, and continued access to capital to fund growth.

Home Properties is a publicly traded apartment real estate investment trust that owns, operates, develops, acquires and rehabilitates apartment communities primarily in selected Northeast and Mid-Atlantic markets.  An S&P 400 Company, Home Properties owns and operates 121 communities containing 41,285 apartment units.  For more information, visit Home Properties' website at homeproperties.com.

SOURCE Home Properties, Inc.