Summary
Extra Space Storage Inc. (EXR) filed an 8-K on July 8, 2019, primarily detailing an amendment to its credit agreement. The key event is the exercise of an accordion option, which increased the total borrowing capacity under its credit facility by $500.0 million, bringing the aggregate borrowing limit to $1.85 billion. This amendment also formalized the full funding of two new term loan facilities (Tranche 3 and Tranche 4) totaling $500.0 million, with maturities in January 2025 and June 2026, respectively. The company retains the flexibility to further increase commitments up to $2.0 billion and extend the revolving credit facility's term. The interest rates are variable, tied to LIBOR or a base rate, with margins that adjust based on the Company's Consolidated Leverage Ratio or its credit rating, offering potential cost savings if investment-grade ratings are achieved.
Key Highlights
- 1Increased total credit facility borrowing capacity by $500.0 million through an accordion option, now totaling $1.85 billion.
- 2Formalized funding of two new senior unsecured term loan facilities (Tranche 3: $245.0 million due Jan 2025, Tranche 4: $255.0 million due June 2026).
- 3Maintains flexibility to increase total commitments up to $2.0 billion.
- 4Ability to extend the revolving credit facility's term for up to two additional six-month periods.
- 5Variable interest rates based on LIBOR or base rate, with margins dependent on the Company's leverage ratio or credit rating.
- 6Potential for lower interest rates if the company achieves a specified investment grade rating.
- 7The company can prepay loans voluntarily, subject to notice requirements and potential penalties on Tranche 4.