Safehold Secures Significant Unsecured Term Loan
Safehold Inc. (NYSE: SAFE) has successfully closed a substantial $400 million unsecured term loan, a significant milestone for the company. This financing enhances Safehold's liquidity and supports its strategic growth initiatives.
Details of the Unsecured Term Loan
The unsecured term loan features a fully extended maturity date, set for November 15, 2030, and comes with two twelve-month extension options. Safehold's strong credit ratings, including A3, A-, and A-, afford the company a competitive borrowing rate of SOFR plus 90 basis points. Additionally, the company has implemented a SOFR swap at a 3.0% strike rate, effective through April 2028, to mitigate risks associated with interest rate fluctuations on this transaction.
Purpose and Use of Proceeds
Proceeds from the loan will primarily be directed toward debt repayment and general corporate purposes. Notably, Safehold recently paid off $227 million of secured debt due in 2027, freeing up the twelve ground lease assets that previously served as collateral. This new unencumbered term loan not only replaces the capital but also bolsters Safehold's liquidity position, which now stands at an impressive $1.3 billion.
Leadership Commentary on the Financing
Brett Asnas, Safehold's Chief Financial Officer, expressed optimism regarding the loan, stating, "This financing represents a strong outcome for Safehold, increasing liquidity and proactively addressing our nearest-term maturity with flexible unsecured capital. We value the support of our banking partners and believe Safehold's uniquely long-term and laddered balance sheet allows us to deliver attractive capital solutions to our customers and generate value for our shareholders."
The Role of Banking Partners
JPMorgan Chase Bank, N.A. has been appointed as the Administrative Agent for this term loan. Other financial institutions playing a pivotal role include Bank of America, Goldman Sachs Bank USA, Mizuho Bank, Ltd., Royal Bank of Canada, and Truist Securities, Inc., all serving as Joint Bookrunners and Joint Lead Arrangers.
About Safehold Inc.
Safehold Inc., listed on the NYSE under the ticker SAFE, continues to lead the transformation of real estate ownership. The company specializes in establishing and managing modern ground leases, a practice it pioneered in 2017. Safehold's innovative approach enables owners of diverse properties—ranging from multifamily units to office buildings and hospitality—to maximize their returns while minimizing associated risks. As a tax-advantaged real estate investment trust (REIT), Safehold is committed to delivering reliable income and capital appreciation to its investors.
Corporate Contact Information
Pearse Hoffmann
Senior Vice President
Head of Corporate Finance
T 212.930.9400
E contact@safeholdinc.com
Frequently Asked Questions
What is the purpose of Safehold's $400 million unsecured term loan?
The loan will be used for debt repayment and to support general corporate purposes, enhancing Safehold's financial flexibility.
How does Safehold's credit rating impact the loan?
Safehold's A3, A-, and A- credit ratings qualify the company for a favorable borrowing rate of SOFR plus 90 basis points.
Who are the key financial partners involved in this loan?
JPMorgan Chase Bank is the Administrative Agent, with Bank of America, Goldman Sachs, Mizuho Bank, Royal Bank of Canada, and Truist Securities as Joint Bookrunners.
How does this loan affect Safehold's liquidity position?
The loan strengthens Safehold's liquidity, increasing it to approximately $1.3 billion and providing financial flexibility for future opportunities.
What is the significance of Safehold in the real estate market?
Safehold is revolutionizing real estate ownership by offering innovative ground lease solutions, helping property owners increase returns with reduced risk.
