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DuPont Fabros Boosts Liquidity

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DuPont Fabros Technology, Inc. – a real estate investment trust (REIT) – recently closed a new senior unsecured term loan worth $195 million. The move depicts the company’s efforts to strengthen its liquidity.

The new unsecured term loan, which bears an interest rate at LIBOR plus 1.75%, will mature on Feb 15, 2019 with no extension options. Notably, this credit revolver is guaranteed by DuPont Fabros and its subsidiaries.

The new unsecured note has an accordion feature that will facilitate expansion of the principal amount to a maximum of up to $250 million. This is however subject to certain conditions, including the agreement of existing or new lenders to offer additional commitments. Moreover, the new unsecured term loan has a delayed draw feature, by which DuPont Fabros has immediately withdrawn $120 million. The company can withdraw the remaining amount within 120 days of the closing date.

For DuPont Fabros, the unsecured term loan attainment will boost its liquidity. The company's cash position stood at $14 million as of Jun 30, 2013. The latest move will bolster DuPont’s finances as the funds can be used to invest in accretive acquisitions and developments as well as for other corporate needs.

Washington, D.C.-based DuPont Fabros is a leading owner, developer, operator and manager of wholesale data centers. The company currently has 10 data centers spanning a total gross area of 2.5 million square feet across 4 major markets in the U.S.

DuPont Fabros currently carries a Zacks Rank #3 (Hold). Better-performing REITs include Sovran Self Storage Inc. , Douglas Emmett Inc (DEI - Free Report) and CubeSmart (CUBE - Free Report) . While Sovran Self Storage carries a Zacks Rank #1 (Strong Buy), Douglas Emmett and CubeSmart both have a Zacks Rank #2 (Buy).

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