Highwoods Properties plans to hit the loan market this summer for a larger credit with an expanded bank group. The company has already tapped existing lead Bank of America for a fully underwritten $350 million unsecured revolver that will be syndicated in July. Hugh Esleeck, treasurer at Highwoods, said the firm plans to turn to the same lenders in the existing $250 million facility, including Wells Fargo, Wachovia, AmSouth Bank, RBC Centura, BB&T, Regions Bank and PNC Bank. He noted that the $100 million increase to the credit might mean new banks will be added to the lending group. Esleeck would not comment on the additional banks.
The new credit, which expires May 1, 2009, rolled up a $100 million Wachovia-led term loan and replaced the existing revolver, both with July 2006 expirations. Highwoods has drawn $268 million from the new agreement and used $10 million in cash to pay off an outstanding balance of $178 million from the previous revolver and the $100 million term loan. The $82 million remaining on the new B of A deal will fund the development pipeline and leave "dry powder" for possible acquisitions, said Esleeck.
The pricing on the new deal is locked at LIBOR plus 80 basis points, a reduction of 25 basis points. Esleeck said Highwoods expects market conditions to remain unchanged when syndication begins and trusts B of A to handle the process. The annual facility fee dropped to 20 basis points from 25 basis points. A one-year extension on the facility is permitted, as well as a $100 million increase prior to May 2008.