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Commercial Net Lease Realty Inc. Bumps Up Borrowing Capacity to $300M

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cpnonline.com
By Gail Kalinoski
December 15, 2005

Saying it gives the company better flexibility to acquire and manage properties, Commercial Net Lease Realty Inc. said today that it has amended its existing unsecured credit facility, extending its maturity until May 2009 and increasing its borrowing capacity from $225 million to $300 million. The new facility also reduces the interest rate to LIBOR plus 80 basis points and provides for a competitive bid option for up to 50 percent of the facility amount.

"It gives us great flexibility to manage our properties portfolio in the most efficient manner," Kevin Habicht (pictured), executive vice president & CFO, told CPN this morning. "When we acquire and develop property, we're able to quickly draw the needed capital as needed. Also, the facility is unsecured so it doesn't come with any of the entanglements sometimes associated in dealing with a mortgage that limits our flexibility to modify leases, renovate properties and sell properties."

Habicht said the $75 million increase in borrowing capacity was meaningful because it allows Commercial Net Lease Realty to more easily buy property portfolios. An equity REIT that specializes in high-quality retail properties, Commercial Net Lease Realty owned 464 investment properties in 41 states as of Sept. 30. "This allows us to do the $100 million to $200 million deals if the opportunities come along," he said. "The ability for us to say we don't need any financing contingency is significant."

Wachovia Securities, Inc. was the sole lead arranger and book manager. Other participating institutions are Wachovia Bank, AmSouth Bank, Wells Fargo Bank, Bank of America, SunTrust Bank, Comerica Inc., PNC Bank, Branch Banking and Trust Company, US Bank, Chevy Chase Bank, Citicorp North America, Inc. and Fifth Third Bank.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.