Mack-Cali Realty Corporation , a real estate investment trust (REIT), recently disclosed that its operating partnership – Mack-Cali Realty, L.P. – refinanced the unsecured revolving credit facility worth $600 million.
The unsecured revolving credit facility is expandable to $1 billion and carries an interest rate equal to LIBOR plus 110 basis points (bps). The facility has a 4-year term with two 6-month extension options and carries a facility fee of 20 bps. Notably, the interest rate and facility fee are subject to adjustment, based on Mack-Cali Realty, L.P.’s unsecured debt ratings.
A consortium of 17 banking giants supported Mack-Cali in the transaction, with JPMorgan Chase Bank, N.A. of JPMorgan Chase & Co. acting as the administrative agent and Bank of America, N.A. of Bank of America Corporation being the syndication agent.
Mack-Cali, cash and cash equivalents of which were $24.2 million as of Mar 31, 2013, will be able to strengthen its financial flexibility and incur lower cost of capital through the latest move.
Lately, Mack-Cali has been revamping a lot. It sold a number of office properties and also inked deals to expand its multifamily residential platform. The noteworthy transactions include the divestiture of a N.J.-based property to The Silverman Group for about $18.0 million. Moreover, the buyout of Alterra IA and Alterra IB at Overlook Ridge in Metro Boston from an operational arm of Prudential Financial Inc. is worth mentioning.
Mack-Cali is slated to release second-quarter 2013 results on Jul 25, before the opening bell. The Zacks Consensus Estimate for funds from operations (FFO) per share for the upcoming quarter is pegged at 62 cents.
The earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Mack-Cali is a positive 1.61% for the second quarter. However, we are skeptical about a positive earnings surprise owing to the company’s Zacks Rank #4 (Sell).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.