Essex gets commitment for up to $500 million senior term loan facility

By Jennifer Chiou

New York, March 18 - Essex Portfolio, LP, the operating partnership of Essex Property Trust, Inc., terminated its prior $1 billion senior unsecured bridge loan commitment and replaced it with a commitment letter for an up to $500 million senior unsecured term loan facility with Citigroup Global Markets Inc., Wells Fargo Bank, NA, Union Bank, NA and U.S. Bank NA, according to an 8-K filing with the Securities and Exchange Commission.

Essex completed the transaction with the consent of BRE Properties Inc.

In December, BRE announced a merger under which it will be acquired by Essex Property Trust for about $4.5 billion in cash and stock.

If the company decides to enter into the term loan facility, Essex will use the proceeds, together with cash on hand and other available funding, to pay a portion of the cash consideration in the merger as well as to repay certain debt of BRE and its subsidiaries.

In consideration for BRE's consent, Essex agreed to retain at least $425 million of available borrowing under its recently increased revolving credit facility and at least $75 million in cash.

The new commitment letter expires on the earliest of the completion of the term loan, the merger consummation date and May 18.

Borrowings would bear interest at Libor plus 100 basis points to 200 bps.

Essex Portfolio is a real estate investment trust based in Palo Alto, Calif.

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