CBRE Group, Inc. (NYSE:CBG) today announced that it has refinanced its existing credit facilities by amending and restating its senior secured credit agreement, which now provides for a $715 million term loan facility and a $1.2 billion revolving credit facility.
This refinancing, coupled with the $800 million of 10-year senior unsecured notes issued earlier this month and cash on hand, has enabled the Company to replace the majority of its indebtedness with new indebtedness at lower interest rates, shift certain indebtedness from floating rate to fixed rate, extend maturity dates, and reduce overall indebtedness.
“Our refinancing activities have positioned CBRE for further growth,” said Robert Sulentic, the Company’s chief executive officer. “Our balance sheet is well structured to support our growth initiatives while also providing us the flexibility to navigate a continued uncertain market environment.”
Among the Company’s plans is to pay down its $450 million, 11.625% senior subordinated notes in June 2013. Following all of its refinancing actions, CBRE will have lowered its total corporate indebtedness by nearly $500 million. On a pro forma basis, CBRE would have reduced its annual interest expense by approximately $50 million in 2012, and its total indebtedness, net of cash, would have been approximately 1.8 times trailing 12-month Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
, excluding selected charges
, at December 31, 2012.
The new senior secured credit agreement includes a 5-year, $500 million term loan A facility (of which $300 million is on a delayed-draw basis up to 120 days from closing), at an initial interest rate of LIBOR+200 basis points, and an 8-year, $215 million term loan B facility, at an interest rate of LIBOR+275 basis points. The borrowing capacity under the Company’s 5-year, revolving credit facility has been increased to $1.2 billion from $700 million. At closing, minimal incremental borrowings will be drawn on this facility, which will have an initial interest rate of LIBOR+200 basis points.