In a significant development, Necessity Retail REIT (RTL) has successfully concluded a $260 million commercial mortgage-backed security loan. The loan is backed by 29 multi-tenant properties owned by RTL across the United States. This move is crucial for RTL as it strives to improve its financial position and prepare for its planned merger with Global Net Lease, Inc.
The loan, with a 10-year term, offers an attractive interest-only feature at 6.45%. RTL was able to secure this favorable rate by utilizing a SOFR swap lock of 3.54% a month before the finalization of the loan. By entering into this swap agreement, RTL was able to protect itself from fluctuations in interest rates, ensuring stability and predictability in its interest payments.
The funds obtained from the loan will be primarily used to pay down RTL’s credit facility as part of its merger strategy with Global Net Lease, Inc. This strategic move aims to enhance RTL’s balance sheet flexibility and improve its debt maturity profile. Additionally, it will help RTL reduce its overall cost of capital, which will have a positive impact on the company’s financial health.
The merger between RTL and Global Net Lease, Inc. holds the potential to bring about synergies and generate value for both entities. By aligning their strengths and resources, the companies aim to enhance operational efficiency and leverage their combined scale to create a stronger competitive position in the market. The successful finalization of the loan demonstrates RTL’s commitment to executing its merger strategy and fortifying its financial position.
With the completion of this loan, RTL is well-positioned to navigate the changing dynamics of the real estate market and capitalize on emerging opportunities. This strategic move will enable RTL to focus on expanding its portfolio, enhancing shareholder value, and delivering sustainable long-term growth.
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– Necessity Retail REIT successfully concludes $260 million loan backed by multi-tenant properties across the United States.