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On Wednesday, Cousins Properties Inc. (CUZ - Analyst Report), the Atlanta-based real estate investment trust (REIT), announced the closing of a fresh $500 million unsecured revolving credit facility. This replaces the existing $350 million facility scheduled to mature in Feb 2016. The new credit facility will mature in May 2019.

For this new credit facility, the benchmark London Interbank Offered Rate (LIBOR) borrowing spread has been lowered to a range of 110–145 basis points, from the earlier 150–210 basis points. The exact spread over LIBOR, however, depends upon the company’s leverage position.

Per the leverage of Mar 31, 2014, the spread in excess of LIBOR for this new credit facility was 110 basis points. However, this new line of credit is contingent upon some financial covenants. According to these, Cousins Properties has to maintain an overall leverage ratio of maximum 60%, an unencumbered interest coverage ratio of at least 2.00 and a fixed charge coverage ratio of at least 1.50.

Cousins Properties is actively engaged in development, acquisition, financing, management and leasing of real estate properties. The company primarily invests in top-tier urban office properties and opportunistic mixed-use developments in Sunbelt markets.

This credit rearrangement is encouraging as it paves way for a lower interest expense as well as financial flexibility for its growth pursuits.

Cousins Properties currently holds a Zacks Rank #3 (Hold). Some better-ranked equity REITs include The GEO Group, Inc. (GEO - Snapshot Report), W. P. Carey Inc. (WPC - Snapshot Report) and Terreno Realty Corp. (TRNO - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

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