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American Finance Completes $715M Million CMBS Financing

New York City-based real estate investment trust American Finance Trust Inc. (AFIN) has borrowed $715 million in a commercial mortgage-backed security financing (CMBS) loan.

“Thanks to the strong underlying assets in AFIN’s portfolio, we were able to complete this financing on what we believe to be very attractive terms,” said Michael Weil, CEO of AFIN. “The CMBS Loan locks in today’s historically low interest rate for five years and extends AFIN’s weighted average debt maturity from 3.5 years to 5.1 years, enhancing value for our company. I am proud that, despite the challenges of the COVID-19 pandemic, our team was able to work with the underwriters to ensure superior execution and pricing on this financing which converted almost 28% of our total outstanding debt from a two-month maturity into a new, five-year financing. We believe this transaction de-risked our portfolio, while giving us flexibility in the future to broaden our capital structure.”

The CMBS Loan is interest-only at an interest rate of 3.74%, has a five-year term and is secured by 368 single-tenant properties. Of these, 223 properties were previously collateral for a loan that had less than two months of term remaining and an effective interest rate of 4.36%. All but one of the remaining properties were part of the borrowing base for AFIN’s corporate credit facility. An aggregate of approximately $499 million of proceeds was used to repay the existing mortgage loan in full, with the balance used to repay amounts outstanding under the company’s corporate credit facility.

 

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