Sun Communities Secures $130M Credit Line
Sun Communities Inc., a real estate investment trust (REIT) that owns and operates manufactured housing and recreational vehicle communities, announced Monday (Oct. 3) that it has entered into a senior secured revolving credit facility in the amount of $130 million with the company's bank group led by Bank of America, N.A. (administrative agent) and Merrill Lynch, Pierce, Fenner & Smith Inc. (sole lead arranger and sole book manager).
The credit facility replaces the Southfield, Mich.-based company's $115 million revolving line of credit which was scheduled to mature on Oct. 1. The facility is secured primarily by a first priority lien on all of the company's equity interests in each entity that owns all or a portion of the properties constituting the borrowing base, according to a news release.
The facility has a built-in accordion feature allowing up to $20 million in additional borrowings and a year extension option, both at the company's discretion. The facility will bear interest at a floating rate based on Eurodollar plus a margin that is determined based on the company's leverage ratio calculated in accordance with the facility, which can range from 2.25% to 2.95%. Based on the company's current leverage ratio, the margin will be 2.75%.
Other banks participating in the transaction include Fifth Third Bank, PNC Bank, The PrivateBank, Citibank, N.A. and Comerica Bank.
At the time of the closing, there were $95 million of borrowings under the facility, including letters of credit issued in the normal course of the company's business.