NexPoint Residential Trust Secures New Corporate Credit Facility
NexPoint Residential Trust Achieves Major Refinancing Milestone
NexPoint Residential Trust, Inc. (NYSE: NXRT) has finalized an important refinancing of its corporate revolving credit facility, an essential step for the company's ongoing growth and expansion in the multifamily real estate sector.
Details of the New Credit Facility
This newly refinanced credit facility is provided by a consortium of prominent financial institutions, including J.P. Morgan Chase Bank, Raymond James Bank, Royal Bank of Canada, and Synovus. With an initial maturity extending to June 2028, there is a possibility of extension until June 2029, demonstrating the lenders' confidence in NexPoint's strategic outlook.
Under this agreement, the interest rate for amounts borrowed is linked to the term Secured Overnight Financing Rate plus 150 basis points, with a potential increase to 225 basis points depending on the company’s leverage ratio as per quarterly assessments. Compared to the previous facility, this new credit agreement has been improved by a 15 basis point reduction across all leverage ratios.
Increased Financial Flexibility
One of the key features of this refinancing is the provision for an increase of up to $200 million in the credit facility, should the lenders agree to boost their commitments. This financial flexibility empowers NexPoint to employ the funds for various strategic initiatives, including acquiring properties deemed beneficial for the company’s portfolio and addressing general corporate needs.
Notably, the credit facility is backed by equity interests in subsidiary entities that own mortgaged properties. This structure ensures that funds can be utilized for tax-efficient capital strategies while supporting the company’s aim of enhancing shareholder value.
Company Perspective and Future Prospects
Matt McGraner, Chief Investment Officer at NexPoint, expressed his optimism regarding the advantages this new credit facility brings. "Our new credit agreement provides us with the flexibility to seize opportunities that drive growth and performance amid evolving market conditions. We sincerely appreciate the unwavering support from all bank partners involved in this transaction; their trust in our operational capacity is invaluable," stated McGraner.
About NexPoint Residential Trust
NexPoint Residential Trust is a leading publicly traded real estate investment trust (REIT) focused on acquiring and managing middle-income multifamily properties in strategic urban regions and surrounding suburban areas. Through its commitment to value-add opportunities, NXRT seeks to generate steady returns for its investors by enhancing property performance. The company receives operational guidance from NexPoint Real Estate Advisors, L.P., a division of NexPoint Advisors, L.P., which boasts significant expertise in real estate investment.
Frequently Asked Questions
What is the recent financing deal that NexPoint completed?
NexPoint Residential Trust refinanced its corporate revolving credit facility, increasing financial flexibility for future growth.
Who are the banks involved in NexPoint's refinancing?
The refinancing involved J.P. Morgan Chase Bank, Raymond James Bank, Royal Bank of Canada, and Synovus.
What are the terms of the new credit facility?
The facility has an initial maturity until June 2028 with a potential extension to June 2029, featuring a favorable interest rate structure.
How much can NexPoint increase its funding under the new facility?
NexPoint can increase the credit facility by up to $200 million if the lenders consent to expand their commitments.
What is the primary focus of NexPoint Residential Trust?
NexPoint focuses on acquiring and operating middle-income multifamily properties, primarily located in key cities and suburban areas.
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