Phillips Edison – ARC Grocery Center REIT II Enters Revolving Credit Facility

Phillips Edison – ARC Grocery Center REIT II (Grocery REIT II) announced today that on July 2, 2014 it entered into a credit facility through Phillips Edison-ARC Grocery Center REIT Operating Partnership, L.P.

The $200 million revolving credit facility includes a sublimit of $20 million for swing line loans and a sublimit of $20 million for letters of credit. It also has an accordion feature that allows the REIT to increase the borrowing capacity up to a total of $700 million.

With a four year term, the credit facility matures on July 2, 2018 but has two six-month extension options. It is also able to switch from secured to unsecured if the company meets certain requirements. In addition, if Grocery REIT II becomes investment grade, the credit facility has a pricing conversion feature that could lower pricing.

The administrative agent under the Credit Facility is KeyBank National Association. JPMorgan Chase Bank, N.A. serves as syndication agent. Co-documentation agents include Bank of America, N.A., Wells Fargo Bank, National Association, and MUFG Union Bank.

N.A. Royal Bank of Canada, Fifth Third Bank, and Capital One, N.A. are also included in the lending syndicate.

The non-traded REIT intends to use the credit facility to finance the purchase of shopping centers that fit the company’s focus.

Grocery REIT II seeks to acquire well-occupied grocery-anchored neighborhood shopping centers that have a mix of national, credit worthy retailers that sell necessity-based goods and services in strong markets across the U.S.

CFO of the REIT, Devin Murphy, commented, “We believe that the broad base of support by top tier financial institutions as well as the flexible structure and competitive terms of the Credit Facility demonstrate the strong partnerships the Company has built within the capital markets community. We very much value these partnerships and appreciate the support as we grow the Company.”

Formed just over a year ago in June, 2013, Grocery REIT II has an offering size of $2 billion.

As of May 5, 2014, its portfolio consisted of two acquisitions.