MILL VALLEY, Calif.--(BUSINESS WIRE)--Four Corners Property Trust (NYSE:FCPT), a real estate investment trust engaged in the ownership of high-quality, net-leased restaurant properties (“FCPT” or the “Company”), announced today that the Company has entered into a $650 million credit agreement consisting of a 5-year term loan of $400 million and a 4-year revolving credit facility of $250 million to replace the Company’s existing $750 million bank credit facility. The recasting extended the maturities of both the term loan and the revolving facility by two years, and increased the Company’s weighted average debt maturity to approximately 5.9 years. FCPT expects to save at least $1.8 million in annual cash interest expense due to reduced margin pricing and lower unused revolver fees.
All of the lenders in the previous credit facility participated in the new facility which was led by JPMorgan Bank, Barclays Bank and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers. Wells Fargo Bank, U.S. Bank National Association and Fifth Third Bank were Documentation Agents and other bank participants were Morgan Stanley Bank, Goldman Sachs Bank, Raymond James Bank, Seaside National Bank & Trust and Woodforest National Bank.
“We are very appreciative of the support of our bank partners and their renewed commitment to our growth and future. The improved pricing and borrowing terms reflect the quality of our portfolio, our disciplined approach to diversification, and our continued commitment to a strong, investment-grade balance sheet,” said Gerry Morgan, Chief Financial Officer of FCPT. Mr. Morgan added, “Our demonstrated access to attractive and diverse long-term debt and equity capital over the last year not only supported the improved pricing and terms, but also allowed us to reduce our borrowing costs by decreasing the size of our revolver.”
The new $400 million unsecured term loan matures in November 2022. The term loan currently bears interest at LIBOR plus 135 basis points versus pricing of LIBOR plus 170 basis points under the previous term loan. Including swaps that effectively fix the interest rate, the term loan’s all-in cash interest rate is approximately 2.7% through November 2018. In conjunction with closing the new facility and as previously disclosed, FCPT established additional swaps in the third quarter that fix 75% of the term loan’s rate exposure from November 2018 through the new maturity date of November 2022. The all-in cash interest rate on the 75% of the term loan that is fixed is approximately 3.0%, 3.1%, 3.4% and 3.5% for 2019, 2020, 2021 and 2022, respectively.
The new $250 million revolving credit facility matures in November 2021 and can be extended for two six-month periods until November 2022 at the Company’s option and subject to satisfaction of certain conditions and the payment of extension fees. Borrowing under the new revolving facility currently bears interest at LIBOR plus 145 basis points versus pricing of LIBOR plus 175 basis points under the previous revolving facility. The unused fee on the revolver was reduced to 30 basis points.
The credit agreement includes a $250 million accordion feature such that the credit facilities can be increased up to $900 million in aggregate, subject to obtaining additional lender commitments.
FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease for use in the restaurant and related food services industry. Additional information about FCPT can be found on the website at www.fcpt.com.
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of Four Corners Property Trust, Inc. (“FCPT”) concerning the proposed transactions, the anticipated consequences and benefits of the transactions and the targeted close date for the transactions, and other future events and their potential effects on FCPT, including, but not limited to, statements relating to anticipated financial and operating results, the company’s plans, objectives, expectations and intentions, cost savings and other statements, including words such as “anticipate,” “believe,” “confident,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of FCPT’s management, and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of FCPT to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, without limitation: changes in asset quality and credit risk; ability to sustain revenue and earnings growth; changes in political, economic or market conditions generally and the real estate and capital markets specifically; the impact of increased competition; the availability of capital and financing; tenant or seller(s) bankruptcies; risks associated with the acquisition, development, expansion, leasing and management of properties; changes in market rental rates; trends in the retail or restaurant industry; relationships with tenants; competitive market forces; the level and volatility of interest rates; the rate of revenue increases as compared to expense increases; the financial stability of tenants within the retail or restaurant industry; the restrictions in current financing arrangements or the failure to comply with such arrangements; the liquidity of real estate investments; the impact of changes to tax legislation and FCPT’s tax positions; failure to qualify as a real estate investment trust; the failure to refinance debt at favorable terms and conditions; loss of key personnel; material changes in the dividend rates on securities or the ability to pay dividends on common shares or other securities; possible restrictions on the ability to operate or dispose of owned properties; the failure to achieve earnings/funds from operations targets or estimates; the failure to achieve projected returns or yields on development and investment properties (including joint ventures); expected gains on debt extinguishment; changes in generally accepted accounting principles or interpretations thereof; terrorist activities and international hostilities; the unfavorable resolution of legal proceedings; the impact of future acquisitions and divestitures; assets that may be subject to impairment charges; significant costs related to environmental issues; and other risks and uncertainties, including those detailed from time to time in FCPT’s statements and periodic reports filed with the Securities and Exchange Commission, including those described under “Risk Factors”. The forward-looking statements in this communication are qualified by these risk factors. Each statement speaks only as of the date of this press release and FCPT undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Actual results may differ materially from current projections, expectations, and plans, if any. Investors, potential investors and others should give careful consideration to these risks and uncertainties.