Self-storage real estate investment trust CubeSmart has closed on a new $600 million unsecured credit facility in relation to its acquisition of Storage Deluxe in late October.
The facility consists of a $100 million term loan with a December 2014 maturity, a $200 million term loan with a March 2017 maturity, and a $300 million revolver with a December 2015 maturity. CubeSmart, at its option, has the right to extend the term of the revolver an additional year.
The new financing, along with the common share and debut preferred equity offerings in October, completes the funding for the $560 million Storage Deluxe acquisition. "The $200 million unsecured term loan provides an attractive component of the acquisition financing with an effective fixed-interest rate of 3.09 percent through its maturity in March 2017, said Chief Financial Officer Timothy Martin. The remainder of this financing allowed us to refinance our existing $100 million term loan and revolving line of credit with improved terms, additional capacity and more attractive pricing."
At closing, CubeSmart drew $100 million of the $200 million term loan maturing in 2017. Proceeds were used to fully repay amounts drawn on its line of credit that were used to fund the first closing of the Storage Deluxe transaction in November. The company anticipates drawing the remaining $100 million balance of the 2017 term loan in conjunction with the second closing of the Storage Deluxe transaction in the first quarter of 2012.
The $100 million three-year term loan was fully drawn at closing. Proceeds from this term loan were used to repay CubeSmarts existing $100 million term loan maturing in December 2013. The company's $300 million revolving line of credit was undrawn and fully available at closing.
In conjunction with the repayment of amounts drawn under the company's prior credit facility, CubeSmartexpects to incur a non-cash charge of approximately $6 million in the fourth quarter to write off previously unamortized costs.
To read more about CubeSmarts acquisition of the Storage Deluxe portfolio, including an overview of the facilities, click here.
CubeSmart owns or manages 456 facilities across the United States and operates the CubeSmart Network, which consists of approximately 838 additional self-storage facilities. The companys services include storage customization, logistics, moving, organizational and office amenities.