Liberty Property Trust
) disclosed a new unsecured revolving credit facility worth $800
million. This replaced an existing facility worth $500 million,
which was due Nov 2, 2015. The move is aimed at strengthening the
balance sheet and availing credit facility at competitive
This new facility bears an annual interest rate of LIBOR
(London Inter-Bank Offer Rate) plus 105 basis points and a
facility fee of 20 basis points. Notably, based on its current
credit rating, Liberty Property got the credit facility at lower
rates compared to the replaced facility (previous rate and
facility fee being LIBOR plus 125 and 25 basis points,
respectively). Through an accordion feature, the facility can be
enhanced to $1.2 billion. Moreover, the initial maturity date of
Mar 26, 2018 can be extended by one additional year.
A consortium of leading financial institutions assisted
Liberty Property in obtaining this credit facility. Among them,
Merrill Lynch, Pierce, Fenner & Smith Incorporated of
Bank of America Corporation
) and J.P. Morgan Securities LLC of
JPMorgan Chase & Co.
) acted as the joint lead arrangers and bookrunners.
We expect the strategic move to improve the company's
liquidity position going forward. This would position it better
to continue to invest in growth needs which go a long in
enhancing top-line. In addition, Liberty Property maintains a
conservative balance sheet and offers a steady dividend payout to
shareholders. As of Dec 31, 2013, the company had cash and cash
equivalents of $163.4 million, up from $38.4 million as of Dec
Last month, this office and industrial real estate investment
trust (REIT), reported fourth-quarter 2013 funds from operations
(FFO) of 63 cents per share, which was in line with the Zacks
Consensus Estimate as well as the prior-year quarter figure. The
decent results were attributable to year-over-year revenue gains,
strong leasing and portfolio restructuring activity.
Liberty Property currently carries a Zacks Rank #3 (Hold).
Another better-ranked REIT stock is
Cousins Properties Inc.
) having a Zacks Rank #2 (Buy).
FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.
BANK OF AMER CP (BAC): Free Stock Analysis
COUSIN PROP INC (CUZ): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
LIBERTY PPTY TR (LPT): Free Stock Analysis
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