Real estate investment trust Sovran Self Storage Inc. announced details of its recent financing arrangement totaling $625 million in senior, unsecured debt. As part of the deal, the company’s revolving credit limit increased from $175 million to $300 million, and the maturity date was extended to Dec. 10, 2019. The interest rate on the revolving credit facility was reduced from 1.5 percent to 1.3 percent over LIBOR based on the company’s current investment-grade credit rating of BBB-. The facility fee was unchanged at 0.20 percent.
The arrangement also reduced the interest rate on the company’s $325 million term notes from 1.65 percent to 1.4 percent over LIBOR. The maturity date remains June 4, 2020. The agreement provides the company an option to increase the facility by another $225 million.
“The continued support from our bank group has further strengthened our already solid credit profile,” said Andrew Gregoire, chief financial operator. “The increased capacity provided on our line of credit and the improved pricing will allow us to continue to execute on our growth plan. In addition, it provides Sovran with a path toward the public-debt market.”
Nine lenders participated in the syndication. Wells Fargo Securities and M&T Bank were joint lead arrangers and bookrunners in the transactions. Wells Fargo Bank served as syndication agent. HSBC Bank USA, PNC Bank, SunTrust Banks and U.S. Bank each served as co-documentation agents.
Sovran has interest-rate swap agreements to effectively convert the $325 million of variable-rate, bank-term notes to fixed-rate debt. The company didn’t enter into any new interest-rate swap agreements in conjunction with the amended facilities, and all existing-swap arrangements remain in place.
Sovran operates more than 500 facilities in 25 states under the Uncle Bob's Self Storage brand name.