MILL VALLEY, Calif. - Four Corners Property Trust (NYSE:FCPT), a real estate investment trust specializing in leasing restaurant and retail properties with a market capitalization of $2.68 billion, has revamped its credit facility, increasing its total capacity from $765 million to $940 million. The company maintains a "GOOD" overall financial health score according to InvestingPro analysis, which has identified several promising indicators including consistent dividend growth for three consecutive years. The new agreement, announced today, features an upsized revolving credit facility now at $350 million and a fresh $225 million term loan. Both credit lines are set to mature in February 2029, with an option for a one-year extension under certain conditions.
The additional term loan will be allocated to repay $150 million of debt due in November 2025. FCPT also secured an extension option for another set of term loans worth $100 million, which will mature in November 2026. The terms for other existing loans with maturities in 2027 and 2028 remain unchanged.
Upon closing, the $590 million in term loans will be fully drawn, providing FCPT with $75 million in incremental proceeds aimed at funding investments and other corporate needs. To manage interest rate exposure, FCPT has entered into $75 million of interest rate swaps, setting the rate at 3.6% until maturity. With the additional costs under the credit agreement, the effective interest rate on the new term loan amounts to 4.6%.
Patrick Wernig, FCPT's CFO, expressed gratitude for the support from the company's banking partners and highlighted the transaction's strategic benefits, stating that it positions the company well for 2025 and beyond. He noted that the new financial arrangement eliminates near-term debt maturities and provides fresh capital for growth, with the additional term loan and expanded revolver capacity secured at attractive rates.
The credit facility's restructuring was facilitated by J.P. Morgan Chase Bank, N.A. and BofA Securities, Inc., serving as Joint Bookrunners and Joint Lead Arrangers. Other financial institutions involved include Fifth Third Bank, N.A., The Huntington National Bank, Truist Bank, U.S. Bank, N.A., Wells Fargo (NYSE:WFC) Bank, N.A., and several additional lenders. With a solid dividend yield of 5.13% and revenue growth of 9.08% over the last twelve months, FCPT continues to demonstrate strong operational performance. InvestingPro subscribers can access detailed analysis of FCPT's comprehensive financial metrics and future growth potential through the exclusive Pro Research Report, available for over 1,400 US stocks.
This financial move is based on a press release statement from FCPT, which aims to strengthen its financial position and enhance its ability to pursue growth opportunities in the real estate sector. The company maintains a healthy gross profit margin of 84.8% and has shown impressive total returns of 24.67% over the past year, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
In other recent news, Four Corners Property Trust (FCPT) has been making strategic moves in the real estate sector. The company recently expanded its portfolio with the acquisition of five Outback Steakhouse locations in Texas, Florida, and Missouri for a total of $19.7 million. This acquisition aligns with FCPT's strategy of growing its portfolio through the purchase of additional real estate assets.
In addition, UBS initiated coverage on FCPT with a Buy rating, citing the company's potential for Adjusted Funds From Operations (AFFO) growth and acquisition momentum. The firm noted FCPT's advantageous cost of capital and diversification strategy, suggesting the company's future acquisitions could be financed through equity or debt.
On the earnings front, FCPT reported a 4.8% increase in cash rental income in Q3, and a decrease in net debt to adjusted EBITDAre ratio. The company acquired 21 properties for $71 million at a 7.2% cap rate, primarily in the restaurant sector. Looking forward, FCPT expects a busy fourth quarter for acquisitions and maintains a strong liquidity position. These are some of the recent developments shaping FCPT's trajectory.
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