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Duke Realty (DRE) Refinances Loan to Upsize Credit Facility

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Duke Realty Corporation (DRE - Free Report) announced that its operating partnership, Duke Realty Limited Partnership, has revised an unsecured revolving credit facility in a bid to increase the company’s borrowing capacity by $800 million and stretch the maturities of its debt by three years.

The company upsized its $1.2-billion credit facility to $2 billion. The restated loan, slated to mature in January 2022, carries an annual interest rate of LIBOR plus 0.875%. It will replace the previous facility bearing an annual interest rate of LIBOR plus 0.925%, which was slated to mature in January 2019.

Two six-month extension options enable the company to stretch the maturities of the assumed debt. The $800-million borrowing increment can be availed by adding term loan commitments or revolving credit commitments.

Moreover, the facility was amended with a view to fulfill commercial paper back-stop requirements of rating agencies. All 15 incumbent banks continue their participation in the restated facility.

Per management, the above-mentioned refinancing arrangement has enabled the company to access debt markets at favorable terms. The improved liquidity position also strengthens Duke Realty’s balance sheet.

The inflated credit facility will complement the company’s efforts to expand its industrial portfolio. This, along with the company’s robust operating platform and strong balance sheet position, will likely help it execute strategic priorities, and drive net asset value and dividend growth.

Shares of Duke Realty have gained 8.9% year to date, outperforming 4.9% growth recorded by the industry.


Also, this Zacks Rank #3 (Hold) company’s third-quarter 2017 and current-year funds from operations (FFO) per share estimates remained unchanged at 29 cents and $1.22, respectively, in a month’s time.

Stocks to Consider

Better-ranked stocks in the real estate investment trust (REIT) space include Sabra Healthcare REIT, Inc. (SBRA - Free Report) , DCT Industrial Trust (DCT - Free Report) and CoreSite Realty Corporation (COR - Free Report) . While Sabra Healthcare sports a Zacks Rank of 1 (Strong Buy), DCT Industrial and CoreSite Realty carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sabra Healthcare’s FFO per share estimates for the current year climbed 3.4% to $2.43 in the past month.

DCT Industrial’s 2017 FFO per share estimates remained unchanged at $2.43 during the same time period.

CoreSite Realty’s FFO per share estimates for full-year 2017 inched up 0.2% to $4.46 in two months’ time.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. 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.

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