This article is from the Australian Property Journal archive
EDT Retail Trust has closed a million nonrecourse financing with a maturity date of September 2017.
The long-term financing comprises two tranches with the majority being originated and initially funded by an affiliate of JP Morgan Chase.
The financing is secured by a pool of seven assets comprising the trust’s entire Longhorn II portfolio plus an additional asset from the trust’s Revolver Portfolio (Riverdale Village Inner Ring). Based on June 2010 valuations the loan represents a total loan to value ratio of approximately 76.8% with blended interest rate of 5.92%, which is fixed for the duration of the loan.
Proceeds from the loan plus an additional .1 million from the trust’s current cash reserves were used to repay the current debt secured against these assets. With this refinancing, the trust has repaid million of short-term mortgage debt with a weighted average duration of less than a year. In addition, the current Shopping Centre debt maturity profile has increased from the recently reported 2.7 years to 3.9 years.
The loan is non-recourse and comprises:
– a senior loan of .3 million initially financed by an affiliate of JP Morgan with an all-in fixed interest rate of 5.01% per annum; and
– a junior loan of .7 million financed by an affiliate of Developers Diversified Realty Corporation (“DDR”) with an all-in fixed interest rate of 10% per annum providing the flexibility to repay in whole or in part after December 2012.
This new facility replaces the existing loan which had a fixed rate of 4.8% and was extended by the prior CMBS provider with an extension fee of 1% per annum (all-in funding cost of 5.8%). Additionally, the new senior facility will allow net cash flow, after operating costs and amortisation on a 30 year schedule, to be made available to the Trust enhancing ongoing liquidity and leasing initiatives.
Post the completion of this loan, over 75% of the trust’s debt matures after January 2013 with a leverage ratio of approximately 65% post Longhorn II refinancing, deleveraging remains the major objective of the trust.
Australian Property Journal
