CBL expands credit facilities to $1.2 billion, converts to unsecured

By Marisa Wong

Madison, Wis., Nov. 19 - CBL & Associates LP, the operating partnership of CBL & Associates Properties, Inc., closed on an extension and modification of its $525 million and $520 million credit facilities on Nov. 13, according to an 8-K filed Monday with the Securities and Exchange Commission.

Both facilities were converted from secured to unsecured, and the total capacity of each facility was increased to $600 million for an aggregate capacity of $1.2 billion.

The first $600 million facility will mature on Nov. 13, 2015 with an option to extend the maturity date to Nov. 11, 2016. The second $600 million facility will mature on Nov. 11, 2016 and may be extended to Nov. 10, 2017.

Interest was changed to one-, three- or six-month Libor plus 155 basis points to 210 bps, depending on the operating partnership's leverage ratio.

There is a fee of either 25 bps or 35 bps based on unused commitments of each facility.

According to the filing, if CBL & Associates LP obtains an investment-grade rating it may make a one-time irrevocable election to use its credit rating to determine the interest rate on each facility. In that case, interest would equal one-, three- or six-month Libor plus 100 bps to 175 bps and the facility fee would range from 15 bps to 35 bps.

Each credit facility contains certain financial covenants including the maintenance of certain financial coverage ratios, minimum net worth requirements, minimum unencumbered asset ratios and maximum secured indebtedness ratios.

At closing, the operating partnership used borrowings from the facilities to retire an unsecured term loan with an outstanding balance of $127.2 million that was scheduled to mature in November 2012.

The company paid fees totaling $4.3 million in connection with the extension and modification of the credit facilities. In addition, the company must pay a one-time extension fee of 0.2% of the total of each credit facility commitment should it exercise either facility's one-year extension option.

Wells Fargo Bank, NA is the administrative agent for each facility.

CBL is a Chattanooga, Tenn.-based real estate investment trust.

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