Phillips Edison Expands Revolving Credit Facility
Phillips Edison enhances financial flexibility with a $1 billion credit facility and sustainability-focused terms.
January 10, 2025
Key Financial Milestone
Phillips Edison & Company, a Maryland-based real estate investment trust specializing in grocery-anchored shopping centers, has significantly enhanced its financial framework. On January 9, 2025, the company finalized a second amendment to its existing credit agreement, increasing its revolving credit facility to $1 billion. This move extends the facility's maturity to 2029, with options for two additional six-month extensions, reflecting the company’s robust financial strategy.
The amendment, entered into with PNC Bank as administrative agent, also introduces new sustainability-focused pricing adjustments. The modified terms will apply starting April 1, 2025, in line with the company’s commitment to environmentally conscious financial practices.
Financial Structure and Covenants
The amended agreement maintains the current terms for the $1 billion revolving credit facility, linking interest rates to sustainability metrics, leverage ratios, and credit ratings. Interest will accrue at Term SOFR or Daily Simple SOFR, plus a variable margin depending on these metrics. Facility fees will range between 0.125% and 0.300%.
The agreement also requires adherence to financial covenants, ensuring fiscal discipline. These include maintaining specific leverage ratios, fixed charge coverage, and a minimum tangible net worth, among others. The operating partnership retains the ability to prepay revolving and term loans without penalties, further enhancing flexibility.
Implications for Stakeholders
With this financial enhancement, Phillips Edison strengthens its liquidity position, better equipping the company to seize growth opportunities while managing risks. Stakeholders, including tenants and investors, may find reassurance in the company's proactive approach to securing long-term financial stability.
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