AMB Property Corp. has added international banks to its syndicate of lenders as it seeks to expand its global presence. United Overseas Bank, Royal Bank of Scotland and Bank of Ireland were all added to the company's recently completed $550 million revolving credit facility. Michael Coke, cfo, said the company's expansion in Asia and Europe prompted it to increase the number of international banks in its lending base. "We are in the midst of global expansion. We are doing significant business in Japan and China. It can be very helpful to have international banks on board," he explained.
JPMorgan and Bank of America are the leads and the administrative agents on the new revolver, which AMB increased by $50 million to $550 million. Pricing was cut 17.5 basis points to LIBOR plus 42 1/2 basis points. Nineteen banks participate in the syndicate. Eurohypo, PNC Real Estate Finance, Wachovia Bank and National Association are documentation agents. Scotia Capital, ING Real Estate Finance, LaSalle Bank and Wells Fargo Bank are managing agents.
Not all of the company's existing lenders were enthusiastic about the price cut. Allied Irish Banks dropped out of the syndicate because of the lower pricing. "We evaluate each project individually based on a number of criteria, one of these being that each project should satisfy the bank's required rate of return," said an Allied Irish spokesman. Key Bank, another lender, also dropped out of the new facility. A Key Bank spokesman declined comment.
The four-year facility allows the company to draw down funds in U.S. dollars, yen, euros or pounds sterling; previously the facility only allowed the company to draw $250 million in currency other than dollars. "It gives us a lot of flexibility to move capital around the globe," said Coke of the advantages of the multi-currency portion of the revolver.
Coke said the company increased its borrowing capacity under the facility because of the company's rapid growth over the past nine years; its assets have grown to $10 billion from $3 billion in 1997, he said. He added that there is a good demand from banks for its paper. "The market for REIT lines of credit have dramatically increased," said Coke. Lead banks kept the company updated with market conditions and it was a joint decision between the property developer and the banks to do the new facility, he explained.