CatchMark Expands Credit Facilities to $638M
Monday, December 11th, 2017
CatchMark Timber Trust, Inc. announced the refinancing of its existing credit facilities through a syndicate led by CoBank, ACB, increasing its total credit capacity from $500 million to $638 million. The new debt facilities include a $35 million, five-year revolving line of credit, a $265 million seven-year multi-draw term loan, a $100 million seven-year term loan, a $119 million nine-year term loan, and a $119 million ten-year term loan.
The refinancing provides additional capital for future acquisitions, joint venture investments, and other general corporate purposes, including share repurchases. The refinancing also provides CatchMark with increased liquidity and a reduction in its effective interest cost.
The benefits of the new credit facility to CatchMark include:
Increases the facility size: The company's borrowing capacity increases by more than $137 million to $638 million compared to the previous credit facilities.
Increases ability to fund JV investments: The capacity for joint venture investments more than doubles.
Provides for extended and staggered maturities: Staggered debt maturities extend the weighted average life of the debt from 5.4 years to 8.9 years compared to the 6.2-year peer average. Maturities extend as far out as 2027.
Improves pricing/interest rate profile: Lowered interest rate spreads and reduced fees cut annual costs compared to previous facilities by 25 basis points or approximately $800,000 based on current debt levels.
Improves key financial covenant: Increase in maximum loan-to-value ratio from 45% to 50% provides immediate increase in borrowing availability of more than $110 million compared to the existing credit facilities and eliminates amortization requirements.
Jerry Barag, CatchMark's President and CEO, said: "In sum, the execution of this refinancing helps us to continue to grow strategically in 2018 and beyond. Our modest leverage remains in a comfortable range as we maximize available capital to continue to build our holdings of high-quality timberlands and further execute our joint venture strategy."