Flexibility and additional capacity were the primary reasons Kite Realty entered into a new four-year, $200 million revolver last month. It is also why the Indianapolis-based real estate investment trust chose an unsecured revolver as opposed to its previous secured credit. "The main reason is with the secured line, each time you put a new property in you have to pay fees as if you are closing on the property," explained Dan Sink, cfo. "Unsecured gives you more flexibility."
The revolver replaces a three-year, $150 million secured revolver it entered into in August 2004. The company also has about $212 million of construction loans outstanding. Kite was able to cut pricing to LIBOR plus 115-135 basis points on the new credit from LIBOR plus 135-160 basis points based on leverage. Sink declined to comment on leverage, but said the new revolver's pricing will initially fall around LIBOR plus 125 basis points.
Kite swapped in some new banks when it entered into the credit as well. KeyBank and Wachovia Securities were the two co-leads while LaSalle Bank, Bank of America, Raymond James Bank, FSB, Citigroup, U.S. Bank and Comerica were also involved in the deal. Sink explained that Citi, B of A, Raymond James and U.S. Bank were all additions while a few from the previous credit were left out. He declined to comment on which banks were eliminated and why, but Lehman Brothers was a co-lead with Wachovia on the previous revolver.