Columbia, Md.-based Corporate Office Properties Trust renewed its existing credit facility, adding $25 million to the facility for a total credit of $125 million. Roger Waesche, cfo, said the company increased the loan by $25 million because it plans to pay down $29 million of outstanding debt it has on its other $50 million facility provided by Prudential Securities. "We want to consolidate all of our bank debt into one loan," he said, explaining the company has decided to go with the larger line provided by Deutsche Bank and retire the Prudential credit.
Waesche pointed to the company's longstanding relationship with Deutsche as the reason the company has turned to the bank as its primary lender. He said the bank has written coverages for the REIT in the past and participated in past equity offerings. Two new banks participating for the first time in the syndicate include Key Bank and Provident, according to Waesche. SunTrust Bank, Chevy Chase Bank also participated in addition to Bank of Nova Scotia and FleetBoston Financial, syndication and documentation agents, respectively.
Waesche said the company was able to keep the same pricing on the new credit. "If you're not leveraged then it's not too bad," said Waesche, describing what his sector has been facing lately in the loan market. Pricing on the new credit swings between LIBOR plus 11/2 % and LIBOR plus 2%, depending upon company performance and a grid tied to the company's overall debt. The new facility matures in March 2004. Corporate Office is a self-managed office REIT focused on suburban office space, located in the Mid-Atlantic region.