SUBSEQUENT EVENTS |
3 Months Ended |
|---|---|
Mar. 31, 2016 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS
Self Storage Property Acquisitions
In April and May 2016, the Company acquired 22 self storage properties for approximately $173.8 million. This included 14 self storage properties from parties related to Hide-Away, which the Company added as its seventh PRO. Consideration for these acquisitions included approximately $43.3 million of cash (including $6.3 million of debt assumed and repaid in the days immediately following an acquisition), OP equity of approximately $79.9 million (consisting of the issuance of 2,348,464 OP Units and 1,467,386 subordinated performance units) and the assumption of $49.5 million of mortgage indebtedness and $1.1 million of other working capital liabilities. Of these acquisitions, 15 were acquired by the Company from its PROs and seven were acquired by the Company from third-party sellers. In connection with these acquisitions, the Company incurred $0.1 million of expenses, payable to certain PROs, for due diligence costs related to the self storage properties sourced by the PROs.
Changes to the Company's Credit Facility
On May 6, 2016, the Company entered into an amended and restated credit facility with a syndicated group of lenders. The amendment increased the credit facility's total borrowing capacity, extended the maturity dates, and reallocated borrowings among term loan tranches and a revolving line of credit. The amendment increased the borrowing capacity of the credit facility by $125.0 million for a total credit facility of $675.0 million, consisting of three components: (i) a revolving line of credit which provides for a total borrowing commitment up to $350.0 million (the "Revolver"), whereby the Company may borrow, repay and re-borrow amounts under the revolving line of credit, (ii) a $225.0 million tranche A term loan facility (the "Term Loan A"), and (iii) a $100.0 million tranche B loan facility (the "Term Loan B" and together with the Revolver and the Term Loan A, the "Facilities").
The Revolver matures in four years; provided that the Company may elect to extend the maturity to five years by paying an extension fee of 0.15% of the total borrowing commitment thereunder at the time of extension and meeting other customary conditions with respect to compliance. The Term Loan A matures in five years and the Term Loan B matures in six years. None of the Facilities is subject to any scheduled reduction or amortization payments prior to maturity.
Interest rates applicable to loans under the Facilities are determined based on a 1, 2, 3 or 6 month LIBOR period (as elected by the Company at the beginning of any applicable interest period) plus an applicable margin or a base rate, determined by the greatest of the Key Bank prime rate, the federal funds rate plus 0.50% or one month LIBOR plus 1.00%, plus an applicable margin. The applicable margins for the Facilities are leverage based and range from 1.35% to 2.15% for LIBOR loans and 0.35% to 1.15% for base rate loans; provided that after such time as the Company achieves an investment grade rating from at least two rating agencies, the Company may elect (but is not required to elect) that the Facilities are subject to the rating based on applicable margins ranging from 0.85% to 2.30% for LIBOR Loans and 0.00% to 1.30% for base rate loans. The Company is also required to pay the following usage based fees ranging from 0.15% to 0.25% with respect to the unused portion of the Revolver; provided that if the Company makes an investment grade pricing election as described in the preceding sentence, the Company will be required to pay rating based fees ranging from 0.125% to 0.300% with respect to the entire Revolver in lieu of any usage based fees.
As of May 6, 2016, $225.0 million was outstanding under the Term Loan A, $100.0 million was outstanding under the Term Loan B, and $181.5 million was outstanding under the Revolver and the Company would have had the capacity to borrow the full remaining Revolver commitments of $168.5 million while remaining in compliance with the Facilities' financial covenants described in the following paragraph.
The Company is required to comply with the following financial covenants under the Facilities:
•Maximum total leverage ratio not to exceed 60%
•Minimum fixed charge coverage ratio of at least 1.5x
•Minimum net worth of at least $682.6 million plus 75% of future equity issuances
•Maximum unsecured debt to unencumbered asset value ratio not to exceed 60%
•Unencumbered adjusted net operating income to unsecured interest expense of at least 2.0x
In addition, the terms of the Facilities contain customary affirmative and negative covenants that, among other things, limit the Company's ability to make distributions or certain investments, incur debt, incur liens and enter into certain transactions.
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