(BRK.A), (BRK.B)
Seritage Growth Properties a national owner of 249 properties totaling over 39 million square feet of gross leasable area, announced today that the Company has entered into a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska.
“This new financing is a transformational step in the evolution of our Company, which we started three years ago, and positions us to further accelerate our role as a leading retail and mixed-use developer across the country,” said Benjamin Schall, President and Chief Executive Officer. “We very much appreciate Berkshire Hathaway’s confidence in our team and platform, and are energized by our growing opportunities to create lasting value for our shareholders, partners and local communities.”
The $2.0 billion Term Loan Facility, which matures on July 31, 2023, provides for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a committed $400 million incremental funding facility (the “Incremental Funding Facility”). Funded amounts under the Term Loan Facility bear interest at a fixed annual rate of 7.00%, while amounts available under Incremental Funding Facility will be subject to a 1.00% annual fee until drawn.
The Company used a portion of the proceeds from the Initial Funding to fully repay its outstanding mortgage loan and unsecured term loan. Net proceeds from the Initial Funding, combined with existing balance sheet cash and the release of cash reserves held by the previous lender as of June 30, 2018, provide the Company with over $600 million of cash liquidity, in addition to access to the $400 million Incremental Funding Facility.
© 2018 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.