Fleet Boston Financial has lined up three banks to round out the syndicate on a $125 million line it is providing for Koger Equity, but is still in search of one additional player. The bank is waiting for one bank which is expected to sign on shortly, said Jeffrey Warwick, senior banker. Fleet, which acted as administrative agent and lead arranger, will hold $35 million. He declined to comment on the hold levels for Wells Fargo Bank, which will be acting as syndication agent, Compass Bank and Comerica Bank.
The line will be used to replace the Jacksonville, Fla., real estate investment trust's current $150 million line of credit. The line was provided by First Union Securities, now Wachovia Securities. Fleet was given the nod to lead the new line because of its longstanding lending relationship with ceo Thomas Crocker before he joined last year from Crocker Realty Trust. The REIT chose to downsize the line because it is flush with cash following a $303 million asset sale, Warwick said. The REIT will draw down a portion of the facility to fund its $125 million acquisition of Three Ravinia Drive in Atlanta.
Pricing on the three-year secured line of credit is based on a grid tied to the REIT's leverage. If leverage levels fall below 35% pricing is at LIBOR plus 165 basis points. If leverage levels remain between 35-45%--where it stands now--the REIT pays 190 basis points. Leverage between 45-55% pushes pricing up to 210 basis points, Warwick said.