Cole Corporate Income closes on $150 million secured revolver due 2015

By Marisa Wong

Madison, Wis., Dec. 6 - Cole Corporate Income Operating Partnership, LP, the operating partnership of Cole Corporate Income Trust, Inc., entered into a $150 million secured revolving credit facility on Nov. 29, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The credit facility allows the operating partnership to borrow up to $150 million in revolving loans, with the maximum amount not exceeding

• 70% of the aggregate value allocated to each qualified property securing the revolving loans during the period from Nov. 29 to Nov. 28, 2013, the tier one period;

• 65% of the aggregate asset value during the period from Nov. 29, 2013 to Nov. 28, 2014, the tier two period; and

• 60% of the aggregate asset value during the period from Nov. 29, 2014 to Nov. 29, 2015, the tier three period.

Up to $30 million of the total amount available may be used for letters of credit and up to $15 million may be used for swingline loans.

The credit facility may be increased up to a maximum of $300 million, with each increase being at least $25 million.

The facility matures on Nov. 29, 2015.

Interest is equal to one-, two-, three- or six-month Libor plus an applicable rate of 350 basis points during the tier one period, 300 bps during the tier two period and 250 bps during the tier three period.

The company was required to pay an arrangement fee and an upfront fee to lenders and will also pay an annual administrative agent fee, as well as a quarterly fee for any unused portion of the facility equal to 35 bps per year.

The credit agreement contains various financial covenants, including minimum net worth, debt service coverage and leverage ratio requirements and maximum variable-rate and recourse debt requirements.

If an event of default occurs, loans will bear interest at a rate 200 bps above the interest rate that would otherwise be applicable.

As of Dec. 5, the borrowing base, based on the underlying collateral pool for qualified properties, and amount outstanding under the credit facility was $55.9 million.

Bank of America, NA is the administrative agent, swingline lender and letter-of-credit issuer. Wells Fargo Bank, NA is the syndication agent.

Cole Corporate Income is a Phoenix-based investor and owner of real estate assets.

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