iStar Financial to launch $900 million in term loans on Thursday

By Sara Rosenberg

New York, Feb. 28 - iStar Financial Inc. is scheduled to hold a bank meeting at 1 p.m. ET on Thursday to launch $900 million of new senior secured term loans, according to a market source.

Barclays Capital Inc. is the lead arranger on the deal.

The debt consists of a $500 million first-out four-year term loan A-1 and a $400 million second-out five-year term loan A-2, the source said.

Outstanding borrowings under the new debt will be collateralized by a $1,125,000,000 pool of diversified collateral of loans, net lease assets and other real estate assets, including assets net leased to Hilton Hotels and Preferred Freezer.

Proceeds will be used to refinance the company's 2012 unsecured debt maturities.

"This new financing will allow us to better align our asset and liability profile, positioning iStar on stronger footing and creating positive momentum for the coming year," said Jay Sugarman, chairman and chief executive officer, in a news release.

At Dec. 31, 2011, the company's net leverage was 2.7 times and gross leverage was 2.1 times.

With this transaction, the company's term loans A-1 and A-2 are staying in place, and the new loans are being done as new tranches, the source added.

iStar Financial is a New York-based finance and investment company focused on the commercial real estate industry.

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