Physicians Realty Trust, a self-managed healthcare real estate investment trust, announced that it entered into a third amended and restated credit agreement (the "Credit Agreement"), extending the maturity date of the Credit Agreement from September 18, 2022 to September 24, 2025 (extendable by two, 6-month periods). In addition, the Credit Agreement reduces the interest rate margins, increases the amount of commitments under the revolving credit facility from $850,000,000 to $1,000,000,000, and modifies certain covenants and terms thereunder to provide the Company and its subsidiaries (including the Operating Partnership) with greater flexibility.
The Amended Credit Facility was arranged by KeyBank, as administrative agent, KeyBanc Capital Markets, BMO Capital Markets and Citizens Bank, as lead arrangers and co-book runners, BMO Capital Markets and Citizens Bank, as co-syndication agents, and the lenders party thereto.
The Credit Agreement continues to contain a term loan facility in the aggregate principal amount of $250,000,000, with a maturity date of June 10, 2023. The Credit Agreement also includes a swingline loan subfacility, and a letter of credit subfacility, each for up to 10% of the aggregate revolving loan commitments under the Credit Agreement. The Credit Agreement provides an accordion feature permitting the Operating Partnership to increase borrowing capacity by up to an additional $500,000,000, subject to customary terms and conditions, resulting in a potential maximum borrowing capacity of $1,750,000,000 (an increase from $1,600,000,000 under the prior credit agreement).
Pursuant to the Credit Agreement, borrowings will bear interest on the outstanding principal amount at a rate equal to LIBOR plus 0.725% to 1.40% (a reduction from 0.775% to 1.45%) in respect of the revolving credit facility and LIBOR plus 0.85% to 1.65% (unchanged) in respect of the term loan facility. The Credit Agreement also provides for borrowing at a base rate plus 0.00% to 0.40% (a reduction from 0.00% to 0.45%) in respect of the revolving credit facility and base rate plus 0.00% to 0.65% (unchanged) in respect of the term loan facility. In each case, the applicable interest rate margin is determined by the current credit rating of the Operating Partnership. The Credit Agreement includes customary LIBOR replacement terms. The Credit Agreement also includes a sustainability component whereby the revolving credit facility pricing can be reduced upon the Company’s achievement of certain sustainability ratings, as determined by an independent third-party evaluation.
Jeff Theiler, Executive Vice President and Chief Financial Officer of the Trust, commented, "We appreciate the strong support and great relationships we’ve built with our existing lenders, all of whom have elected to participate in this amendment. In addition to extending the maturity date of the revolving component of the Credit Facility to 2025, this transaction reduces interest costs and provides additional flexibility to help support the Company’s growth."