Sovran Self Storage, Inc. (NYSE:SSS), a self storage real estate investment trust (REIT), today announced details of financing arrangements totaling $625 million of senior, unsecured debt.
As part of the new arrangement, the Company’s revolving credit limit increased from $175 million to $300 million, and the maturity date was extended to December 10, 2019. The interest rate on the revolving credit facility was reduced from 1.50% over LIBOR to 1.30% over LIBOR, based on the Company’s current investment grade credit rating of BBB-. The facility fee was unchanged at 0.20%. The arrangement also reduced the interest rate on the Company’s $325 million term notes from 1.65% over LIBOR to 1.40% over LIBOR based on the Company’s current investment grade credit rating. The maturity date for the $325 million of bank term notes remains June 4, 2020. The agreement provides the Company an option to increase the facility by an additional $225 million. “The continued support from our bank group has further strengthened our already solid credit profile,” commented Andrew Gregoire, CFO. “The increased capacity provided on our line of credit and the improved pricing will allow us to continue to execute on our growth plan. In addition, it provides Sovran with a path toward the public debt market.” Wells Fargo Securities and M&T Bank were Joint Lead Arrangers and Joint Bookrunners in the transactions; Wells Fargo Bank served as Syndication Agent; SunTrust Bank, HSBC Bank USA, N.A., PNC Bank, N.A. and U.S. Bank, N.A., each served as Co-Documentation Agents. A total of nine lenders participated in the syndication. As detailed below, the Company has interest rate swap agreements in effect to effectively convert the $325 million of variable-rate bank term notes to fixed-rate debt. The Company did not enter into any new interest rate swap agreements in conjunction with the amended facilities, and all of the existing swap arrangements remain in place. Existing Interest Rate Swap Agreements:
“The increased capacity provided on our line of credit and the improved pricing will allow us to continue to execute on our growth plan. In addition, it provides Sovran with a path toward the public debt market.”
Fixed LIBOR Rate Paid