American Assets Trust, Inc. Increases Borrowings and Extends Maturity Date in its Amended and Restated Term Loan Agreement

Rhea-AI Summary

American Assets Trust (NYSE:AAT) announced an amendment to its term loan agreement, increasing borrowings from $150 million to $225 million. The maturity date has been extended to January 5, 2025, and borrowings will transition to the Secured Overnight Financing Rate (SOFR) from LIBOR. The term loan is unsecured, and interest rates will be approximately 5.47% for the first year and 5.57% for the second year. This strategic move enhances the company’s financial flexibility and aligns with current market conditions.

Positive

• Increased borrowings from $150 million to $225 million.
• Extended maturity date from March 1, 2023, to January 5, 2025.
• Transitioning borrowings to SOFR from LIBOR improves financial stability.

Negative

• None.

SAN DIEGO, Jan. 05, 2023 (GLOBE NEWSWIRE) -- American Assets Trust, Inc. (NYSE:AAT) (the “Company”) announced today that it has amended and restated its existing term loan agreement.

The term loan agreement was amended and restated to, among other things, (1) increase the fully-drawn borrowings from $150 million to $225 million, (2) extend the maturity date from March 1, 2023 to January 5, 2025 (with one, twelve-month extension option) and (3) transition borrowings to the Secured Overnight Financing Rate (SOFR), and away from LIBOR. The $225 million term loan is unsecured.

Prior to amending and restating the term loan agreement, the Company entered into interest rate swaps that are intended to fix the interest rate on the $225 million term loan at approximately (1) 5.47% for the first year of the amended and restated term loan and (2) 5.57% for the second year of the amended and restated term loan, subject to adjustments based on the Company’s consolidated leverage ratio.

Additional information regarding the Amended and Restated Term Loan Agreement can be found in the Company’s Form 8-K filed on January 5, 2023 with the Securities and Exchange Commission.

About American Assets Trust, Inc.

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust ("REIT"), headquartered in San Diego, California. The company has over 50 years of experience in acquiring, improving, developing and managing premier office, retail, and residential properties throughout the United States in some of the nation’s most dynamic, high-barrier-to-entry markets primarily in Southern California, Northern California, Washington, Oregon, Texas and Hawaii.  The company's office portfolio comprises approximately 4.0 million rentable square feet, and its retail portfolio comprises approximately 3.1 million rentable square feet. In addition, the company owns one mixed-use property (including approximately 94,000 rentable square feet of retail space and a 369-room all-suite hotel) and 2,110 multifamily units. In 2011, the company was formed to succeed to the real estate business of American Assets, Inc., a privately held corporation founded in 1967 and, as such, has significant experience, long-standing relationships and extensive knowledge of its core markets, submarkets and asset classes. For additional information, please visit www.americanassetstrust.com.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the impact of epidemics, pandemics, or other outbreaks of illness, disease or virus (such as the outbreak of COVID-19 and its variants) and the actions taken by government authorities and others related thereto, including the ability of our company, our properties and our tenants to operate; adverse economic or real estate developments in our markets; our failure to generate sufficient cash flows to service our outstanding indebtedness; defaults on, early terminations of or non-renewal of leases by tenants, including significant tenants; difficulties in identifying properties to acquire and completing acquisitions; difficulties in completing dispositions; our failure to successfully operate acquired properties and operations; our inability to develop or redevelop our properties due to market conditions; fluctuations in interest rates and increased operating costs; risks related to joint venture arrangements; our failure to obtain necessary outside financing; on-going litigation; general economic conditions; financial market fluctuations; risks that affect the general retail, office, multifamily and mixed-use environment; the competitive environment in which we operate; decreased rental rates or increased vacancy rates; conflicts of interests with our officers or directors; lack or insufficient amounts of insurance; environmental uncertainties and risks related to adverse weather conditions and natural disasters; other factors affecting the real estate industry generally; limitations imposed on our business and our ability to satisfy complex rules in order for us to continue to qualify as a REIT for U.S. federal income tax purposes; and changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs. While forward-looking statements reflect the company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. For a further discussion of these and other factors that could cause the company's future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company's most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Source: American Assets Trust, Inc.

Investor and Media Contact:

American Assets Trust

Robert F. Barton
Executive Vice President and Chief Financial Officer
858-350-2607 

FAQ

What is the significance of the term loan amendment for AAT?

The amendment allows AAT to increase borrowings and extend maturity, providing enhanced financial flexibility.

What is the new maturity date for American Assets Trust's term loan?

The new maturity date is January 5, 2025.

How much are the borrowings increased to in the amended term loan for AAT?

The borrowings have been increased to $225 million.

What interest rates will AAT face on the new term loan?

The interest rates are approximately 5.47% for the first year and 5.57% for the second year.

How does the shift from LIBOR to SOFR affect AAT?

Transitioning to SOFR helps AAT align with current market standards and may reduce interest rate risks.