), a real estate investment trust (REIT), announced amendments to
its credit facility and term loan agreements worth $800 million.
The move is expected to enable the company to reduce borrowing
costs and extend its debt maturity.
CubeSmart amended about $200 million in senior unsecured term
loan facility. The term loan facility consisted of two term loans
of $100 million each. The maturity date of the "Term Loan A", a
5-year loan, was extended to Jun 2018 from Jun 2016. However, the
maturity date of the "Term Loan B" remained unchanged. Moreover,
CubeSmart's move enabled it to reduce the interest rate of "Term
Loan A" by 35 basis points to LIBOR plus 150 basis points.
Additionally, CubeSmart amended about $600 million worth of
senior unsecured credit facility. The credit facility consisted
of "Term Loan C" worth $100 million, "Term Loan D" worth $200
million and a revolving credit worth $300 million. "Term Loan C',
due to mature in Dec 2014, remained unchanged. However, the
maturity date of 'Term Loan D" was extended to Jan 2019 from Mar
2017 and that of revolving credit was revised to Jun 2017 from
Dec 2015, with a 1-year extension option.
Furthermore, CubeSmart's move enabled it to reduce the interest
rate of credit facility by 25 basis points each to LIBOR plus 150
basis points for both "Term Loan C" and "Term Loan D". The
interest rate of revolving credit was reduced by 20 basis points
to 160 basis points.
However, CubeSmart did not foray into any new hedging
arrangements along with the amended facilities. Therefore, the
company's existing hedging arrangements stand as before.
CubeSmart's move to amend its credit facility and term loan
agreement is a strategic fit. Also, this move is expected to aid
the company continue with its portfolio repositioning activity.
Some other firms that have recently amended credit facility and
term loan agreements include
Diamondrock Hospitality Co
UDR recently amended and re-priced its revolving credit facility
worth $900 million and term loans worth $350 million,
respectively. On the other hand, in Nov 2012, DiamondRock
Hospitality amended its $200 million senior unsecured credit
facility, which will enable the company to reduce borrowing costs
and extend its debt maturity.
CubeSmart currently carries a Zacks Rank #2 (Buy).
) is also worth a look with a Zacks Rank #1 (Strong Buy).
CUBESMART (CUBE): Free Stock Analysis Report
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