- Nexus Industrial REIT (NXR.UN) signed senior unsecured credit facilities totalling $375 million
- The unsecured facilities have three parts which include a $190 million revolving facility, a $175 million term loan facility and a $10 million swingline facility
- Nexus secured the facilities so as to have a significant increase in financial resources and flexibility to boost its growth plans
- It also represents the completion of the next step in the process of the REIT achieving an institutional quality credit rating
- Nexus Industrial REIT is a real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties in Canada
- Nexus Industrial REIT (NXR.UN) opened trading at $10.89 per share
Nexus Industrial REIT (NXR.UN) has signed senior unsecured credit facilities totalling $375 million.
The unsecured facilities have been arranged through a syndicate of six banks, with BMO Capital Markets acting as lead arranger and sole bookrunner.
The unsecured facilities have three parts which include a $190 million revolving facility, a $175 million term loan facility and a $10 million swingline facility. They allow the REIT to borrow in the form of banker’s acceptances or prime rate advances.
Not every company can readily secure such a large loan. The size of the facilities and the fact that they were unsecured provides trust in the credit rating of Nexus as a company.
At closing of the unsecured facilities, the REIT had an unencumbered asset pool of $310 million.
The REIT had earlier announced $285 million in acquisitions which may be added to the unencumbered asset pool on completion of the acquisitions. The unsecured facilities replace the REIT’s previous $140 million secured credit facility.
Borrowings under the unsecured facilities will be priced based on a grid, which is initially measured based on the REIT’s debt to total assets.
At closing, and for so long as the REIT’s debt to total assets is less than 50 per cent, borrowing under the unsecured facilities will be priced at the banker’s acceptance rate plus 170 basis points or bank prime plus 70 basis points. If and when the REIT obtains a credit rating, pricing will instead be based upon that credit rating.
Nexus secured the facilities so as to have a significant increase in financial resources and flexibility to boost its growth plans. It also represents the completion of the next step in the process of the REIT achieving an institutional quality credit rating.
“The ability of the REIT to obtain unsecured debt at pricing that is equivalent to what institutional credit borrowers would receive is a testament to the quality of the REIT’s portfolio and its balance sheet,” noted Kelly Hanczyk, Chief Executive Officer of the REIT .
Nexus Industrial REIT is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada and the ownership and management of its portfolio of properties.
Nexus Industrial REIT (NXR.UN) opened trading at $10.89 per share.
