Summary
Equity Residential (EQR), through its operating partnership ERP Operating Limited Partnership, announced on July 13, 2011, the execution of a new $1.25 billion unsecured revolving credit agreement. This agreement replaces an existing facility set to mature in February 2012, providing the company with enhanced financial flexibility and a longer-term funding source. The new credit facility matures in July 2014, with an option for a one-year extension, and offers the potential to increase borrowing capacity up to $1.75 billion.
Key Highlights
- 1ERP Operating Limited Partnership entered into a new $1.25 billion unsecured revolving credit agreement on July 13, 2011.
- 2The new credit facility replaces the previous one that was scheduled to mature in February 2012.
- 3The maturity date for the new credit facility is July 13, 2014, with a one-year extension option.
- 4The company has the ability to increase the total borrowing capacity of the facility to $1.75 billion.
- 5Equity Residential, as the sole general partner, remains a guarantor of the Operating Partnership's obligations under the new credit facility.
- 6Interest rates are based on LIBOR plus a spread, which varies with the Operating Partnership's credit rating (currently 115 basis points).
- 7An annual facility fee of 20 basis points is also applicable, based on the credit rating.
Frequently Asked Questions
This 8-K filing primarily announces the creation of a material definitive agreement related to a new credit facility for Equity Residential's operating partnership, ERP Operating Limited Partnership.
The new credit facility is for $1.25 billion, is unsecured, matures on July 13, 2014 (with a one-year extension option), and can potentially be expanded to $1.75 billion. Interest rates are tied to LIBOR plus a spread based on credit rating, and there's an annual facility fee.
Equity Residential, as the sole general partner of ERP Operating Limited Partnership, remains a guarantor of the operating partnership's obligations under this new credit facility, indicating continued support and financial commitment.
The new facility provides greater financial flexibility by replacing an upcoming maturity with a longer-term agreement, increases potential borrowing capacity, and establishes a framework for ongoing liquidity needs for the company's operations and growth.