RMR Real Estate Income Fund (NYSE MKT: RIF) today announced that it has entered into a new $50 million revolving credit facility with BNP Paribas Prime Brokerage, Inc. (“BNP”). The new credit facility bears interest at LIBOR plus 95 basis points and it has a 270 day rolling term that resets daily. The new credit facility requires RIF to pledge portfolio securities as collateral up to 250% of the loan balance outstanding. The new credit facility also permits BNP to lend portfolio securities pledged by RIF up to the loan balance outstanding, and RIF will receive a portion of the revenue earned in connection with lending its portfolio securities. RIF expects to use the new credit facility to repay amounts outstanding under, and terminate, its existing $10 million revolving credit facility, to fund additional investments and for additional financial flexibility in managing its investment portfolio. RIF is a closed end investment company advised by RMR Advisors, Inc. WARNINGS REGARDING FORWARD LOOKING STATEMENTS THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON RIF’S PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR NUMEROUS REASONS, SOME OF WHICH ARE BEYOND RIF’S CONTROL. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT RIF HAS ENTERED INTO A NEW $50 MILLION REVOLVING CREDIT FACILITY. RIF MAY BORROW LESS THAN $50 MILLION UNDER THE FACILITY. IN ADDITION, THE AVAILABILITY OF BORROWINGS UNDER THE FACILITY IS SUBJECT TO RIF SATISFYING CERTAIN COLLATERAL REQUIREMENTS, FINANCIAL COVENANTS AND REGULATORY ASSET COVERAGE TESTS. THEREFORE, IT IS POSSIBLE THAT RIF WILL BE UNABLE TO BORROW UNDER THE FACILITY OR MAY ONLY BE ABLE TO BORROW LESS THAN $50 MILLION UNDER THE FACILITY.
- ACTUAL COSTS UNDER THE NEW CREDIT FACILITY MAY BE HIGHER THAN LIBOR PLUS 95 BASIS POINTS BECAUSE OF OTHER FEES AND EXPENSES ASSOCIATED WITH THE FACILITY, SUCH AS A FEE OF 55 BASIS POINTS THAT IS CHARGED ON AMOUNTS THAT ARE COMMITTED TO BUT UNDRAWN UNDER THE FACILITY. THE NEW CREDIT FACILITY ALSO PROVIDES BNP THE ABILITY TO INCREASE THE RATE PAID ON BORROWINGS UNDER THE FACILITY ON 270 DAYS ADVANCE NOTICE.