Jernigan Capital, Inc. Closes New Credit Facility
- $100 Million Committed Amount, Expandable Up to $200 Million - - Provides Additional Lower-Cost Capital to Fund Robust Investment Pipeline -
Jernigan Capital, Inc. (NYSE:JCAP) (the “Company”) announced today that it has entered into a credit agreement for a secured revolving credit facility with a syndicate of banks led by KeyBank National Association and Raymond James Bank, N.A. The $100 million credit facility, which has an accordion feature permitting expansion up to $200 million, subject to certain conditions including obtaining additional commitments from lenders, will provide lower cost debt financing for the Company’s pipeline of self-storage development investments.
The credit agreement has a three-year term that expires July 24, 2020. Borrowings under the credit facility are secured by two separate pools of collateral: one consisting of the Company’s mortgage loans extended to developers of self-storage properties and the other consisting of self-storage properties owned by the Company. Advances under the credit agreement bear interest at rates between 275 and 375 basis points over 30-day LIBOR. At such time as the Company has borrowings equaling or exceeding $50.0 million, the Company is required by the credit agreement to hedge at least 75% of its floating rate borrowings. The Company intends to enter into a swap or cap agreement to fix its LIBOR-based borrowings under the credit facility when borrowings under the credit facility reach $50 million.
“With the procurement of up to $100.0 million of new committed capital we are positioned to fund our robust pipeline of well-located state-of-the-art self-storage development investments,” commented John Good, President and Chief Operating Officer of the Company. “This credit facility is expected to provide the ability to better match fund our development pipeline at a lower-cost, allowing us to efficiently manage our capital in a manner that we believe continues to enhance shareholder value.”
As of the time of closing, the Company has borrowing capacity of approximately $33.3 million under the credit facility, of which $20.0 million was drawn at closing. In connection with closing the credit facility, the Company repurchased the senior participations on five self-storage development loans it had sold in mid-2016, and plans to utilize proceeds from its recently completed follow-on public offering to pay down the credit facility to eliminate approximately $200,000 per quarter of interest expense on those senior participations.
KeyBanc Capital Markets, Inc. and Raymond James Bank, N.A. acted as joint lead arrangers for the credit facility. KeyBank N.A. acted as the Administrative Agent for the credit facility and Raymond James Bank, N.A. acted as syndication agent. Other banks participating in the credit facility are Trustmark National Bank, FirstBank, Triumph Bank and Renasant Bank.
About Jernigan Capital, Inc.
Jernigan Capital, Inc. is a New York Stock Exchange-listed real estate investment trust (NYSE: JCAP) that provides debt and equity capital to private developers, owners, and operators of self-storage facilities. Our mission is to be the preeminent capital partner for self-storage entrepreneurs nationwide by offering creative solutions through an experienced team demonstrating the highest levels of integrity, dedication, excellence and community, while maximizing shareholder value. The Jernigan Capital team has extensive experience in over 100 U.S. markets—from acquiring and managing self-storage properties to new self-storage development—providing JCAP with knowledge unmatched by any lender, broker or advisor to the sector. Jernigan Capital is the only source of construction and development capital focused solely on the self-storage sector.
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including statements regarding, including statements regarding total availability under the credit facility and the availability of the accordion feature of the facility, our future performance, our second quarter 2017 earnings guidance and full year 2017 updated earnings guidance, including related key assumptions, future profits from investments, our anticipated loan closings, our access to capital and our ability to fund our existing loan commitments. The ultimate occurrence of events and results referenced in these forward-looking statements is subject to known and unknown risks and uncertainties, many of which are beyond our control. These forward-looking statements are based upon the Company's present intentions and expectations, but the events and results referenced in these statements are not guaranteed to occur. Investors should not place undue reliance upon forward-looking statements. For a discussion of these and other risks facing our business, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and our other filings with the SEC from time to time, which are accessible on the SEC’s website at www.sec.gov.