Dealmaker: Mack-Cali Closes $350M Unsecured Term Loan

Mack-Cali Realty Corp., Edison, N.J., closed on a new $350 million unsecured term loan, which matures in January 2019 with two one-year extension options.

The interest rate, currently 140 basis points over LIBOR, can change based on the real estate investment trust’s unsecured debt ratings or a defined leverage ratio at Mack-Cali’s option. Mack-Cali entered into interest rate swap arrangements to fix LIBOR for the loan’s duration. The loan’s current all-in fixed rate of 3.12 percent includes no full or partial prepayment premium.

Mack-Cali used loan proceeds to repay its $200 million, 5.8 percent unsecured bonds scheduled to mature on January 15. “The debt cost represents significant interest savings compared to the 5.8 percent bonds maturing this month,” said Mack-Cali CFO Tony Krug. The firm will also pay down outstanding borrowings on its $600 million unsecured credit facility.

Merrill Lynch, Pierce, Fenner & Smith Inc., JPMorgan Securities LLC and Wells Fargo Securities LLC served as the joint lead arrangers. Bank of America NA served as administrative agent; JPMorganChase Bank NA, Wells Fargo Bank NA and Capital One NA served as syndication agents; and U.S. Bank NA served as documentation agent. Other participants in the loan included PNC Bank NA and Citibank NA.

“With our bank group, Mack-Cali has successfully executed this new unsecured term loan and swapped to a fixed rate for a five-year period,” Krug said, noting that the new loan provides an attractive source of capital and results in an anticipated new debt maturity in 2021.