Franklin Street Properties Corp. Announces $220 Million Unsecured Seven Year Term Loan With A Fixed Rate

Business Wire

WAKEFIELD, Mass.--(BUSINESS WIRE)--

Franklin Street Properties Corp. (the “Company”, “FSP”, “our” or “we”) (NYSE MKT: FSP) announced today the closing of an unsecured term loan with a group of banks (the “Term Loan”). The total borrowed under the Term Loan is $220 million. The Term Loan includes an accordion feature that allows for up to $50 million of additional borrowing capacity subject to receipt of lender commitments and satisfaction of certain customary conditions. The Term Loan has a term of seven years that matures on August 26, 2020. The Term Loan bears interest at either (i) a LIBOR based rate plus 145 to 220 basis points depending on the Company’s total leverage ratio for the applicable period (LIBOR plus 165 basis points at August 26, 2013) or (ii) a rate equal to the bank’s base rate plus 45 to 120 basis points depending on the Company’s total leverage ratio for the applicable period (the bank’s base rate plus 65 basis points at August 26, 2013). Although the interest rate on the Term Loan is variable, the Company elected to fix the base LIBOR interest rate at 2.32% per annum for seven years by entering into an interest rate swap. Accordingly, based upon the Company’s total leverage ratio, as of August 26, 2013, the effective interest rate on the Term Loan is 3.97% per annum.

George Carter, President and Chief Executive Officer of FSP said, “We proactively decided to close this $220 million, seven-year, unsecured term loan with a fixed rate to assist us in our continuing growth plans. We anticipate using the net proceeds of this unsecured term loan to fund a portion of our pending acquisition of 1001 17th Street, Denver, Colorado, which we expect to close on August 28, 2013. With this unsecured term loan in place, as of August 26, 2013, 100% of our total debt is unsecured, approximately 65% of our total debt is fixed and approximately 35% of our total debt is variable. We are pleased to put this unsecured term loan in place and appreciate the confidence shown in FSP by each of the participating banks.”

Bank of Montreal is serving as Administrative Agent for the Term Loan. Participating banks include:

Name of Institution

         

Title

 
Bank of Montreal Administrative Agent
PNC Bank, National Association Syndication Agent
Capital One, N.A. Documentation Agent
RBS Citizens, N.A. Lender
TD Bank, N.A. Lender
Regions Financial Corporation Lender
BB&T Corporation Lender
 

About Franklin Street Properties Corp.

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on investing in institutional-quality office properties in the U.S. FSP’s strategy is to invest in select urban infill and central business district (CBD) properties, with primary emphasis on our top five markets of Atlanta, Dallas, Denver, Houston, and Minneapolis. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes. To learn more about FSP please visit our website at www.franklinstreetproperties.com.

Forward-Looking Statements

Statements made in this press release that state FSP’s or management’s intentions, beliefs, expectations, or predictions for the future may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may also contain forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Investors are cautioned that our forward-looking statements involve risks and uncertainty, including without limitation, economic conditions in the United States, disruptions in the debt markets, economic conditions in the markets in which we own properties, risks of a lessening of demand for the types of real estate owned by us, changes in government regulations, geopolitical events and expenditures that cannot be anticipated such as utility rate and usage increases, unanticipated repairs, additional staffing, insurance increases and real estate tax valuation reassessments. See the “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012, as the same may be updated from time to time in subsequent filings with the U.S. Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We will not update any of the forward-looking statements after the date of this press release to conform them to actual results or to changes in our expectations that occur after such date, other than as required by law.

Contact:
Franklin Street Properties Corp.
John Demeritt, 877-686-9496
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