Jernigan Capital Upsizes Credit Facility to $235 Million, Extends Maturity and Adds Banks
-Provides Capital to Fund the Company’s Current Development Pipeline and Developer Buy-Outs-
Jernigan Capital, Inc. (NYSE: JCAP) (the “Company”) announced that on December 28, 2018, it entered into an amended and restated senior secured revolving credit facility of up to $235 million with a syndicate of banks led by KeyBank National Association, Raymond James Bank, N.A., and BMO Harris Bank N.A. The $235 million credit facility, which has an accordion feature permitting expansion up to $400 million, subject to certain conditions including obtaining additional commitments from lenders, has a three-year term that expires December 28, 2021 and two one-year extension options to extend the maturity of the facility to December 28, 2023. The amended credit facility more than doubles the Company’s access to committed credit, from $100 million to $235 million, increases the accordion from $100 million to $165 million (subject to syndication) and extends the maturity (assuming extension options are exercised) by approximately 3 ½ years from July 24, 2020 to December 28, 2023.
Borrowings under the credit facility are secured by three separate pools of collateral: one consisting of the Company’s mortgage loans extended to developers of self-storage properties, one consisting of non-stabilized self-storage properties wholly-owned by the Company, and the last consisting of stabilized self-storage properties wholly-owned by the Company. Advances under the credit agreement bear interest at rates between 225 and 325 basis points over 30-day LIBOR. These spreads are 50 basis points lower than the spreads under the previous credit facility, which were 275 and 375 basis points, respectively.
“This new facility marks another major milestone for JCAP,” said John Good, Chief Executive Officer of the Company. “With the amendment and restatement of our credit facility, we have significantly increased our access to capital at a lower cost. Solid execution of JCAP’s business plan, evidenced by strong relationships with a select group of developers who are building best-of-class facilities generally on-time and on-budget, successful leasing of completed projects and a proven ability to capitalize on opportunities to own new state-of-the-art self-storage facilities in great submarkets in major U.S. cities, has attracted additional banks with ability to grow with us.”
“With an untapped $235 million credit facility (plus a $165 million accordion), a recently refreshed $75 million common ATM program and very low leverage, we believe we are entering 2019 in a very strong capital position,” added Mr. Good. “Our contractual investment commitments in our development pipeline are now fully-covered at conservative leverage levels for the foreseeable future, and we have created dry powder to continue making investments in both new development projects and developer buy-outs.”
As of the time of closing, the Company had borrowing capacity of approximately $91.3 million under the credit facility, of which none was drawn.
KeyBanc Capital Markets, Inc., Raymond James Bank, N.A. and BMO Capital Markets Corp. acted as joint lead arrangers and syndication agents for the credit facility. KeyBank N.A. acted as the Administrative Agent for the credit facility. Other banks participating in the credit facility are Trustmark National Bank, Pinnacle Bank, FirstBank, Triumph Bank and Renasant Bank.
About Jernigan Capital, Inc.
Jernigan Capital 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 with a view to eventual outright ownership of facilities we finance. Our mission is to maximize shareholder value by accumulating a multi-billion-dollar investment portfolio consisting of the newest, most attractive and best located self-storage facilities in the United States through a talented and experienced team demonstrating the highest levels of integrity, dedication, excellence and community.
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our ability to exercise the accordion of our credit facility. 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and those set forth in the Company’s other reports and information filed with the Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov.