American Finance Completes $715 Million CMBS Financing

Rhea-AI Summary

American Finance Trust (Nasdaq: AFIN) announced a significant financing transaction, borrowing $715 million through a commercial mortgage-backed security (CMBS) loan. This loan features a 3.74% interest rate and a five-year term, securing it against 368 properties. The financing extends AFIN's average debt maturity from 3.5 years to 5.1 years, enabling a shift from high-risk, short-term debt to more stable, long-term financing. The total proceeds included approximately $499 million to repay existing loans, enhancing the company’s capital structure and de-risking its portfolio.

Positive

• Successfully completed a $715 million financing transaction.
• Secured a low interest rate of 3.74% for five years.
• Extended average debt maturity from 3.5 years to 5.1 years.
• Converted 28% of total outstanding debt from 2-month maturity to a new five-year financing.
• Enhanced capital structure and portfolio stability.

Negative

• None.

NEW YORK, July 27, 2020 /PRNewswire/ -- American Finance Trust, Inc. (Nasdaq: AFIN) ("AFIN" or the "Company") announced today that the Company entered into a financing transaction with an institutional lender and borrowed $715 million in a commercial mortgage backed security financing (the "CMBS Loan").

"Thanks to the strong underlying assets in AFIN's portfolio, we were able to complete this financing on what we believe to be very attractive terms," said Michael Weil, CEO of AFIN. "The CMBS Loan locks in today's historically low interest rate for five years and extends AFIN's weighted average debt maturity from 3.5 years to 5.1 years, enhancing value for our Company.  I am proud that, despite the challenges of the COVID-19 pandemic, our team was able to work with the underwriters to ensure superior execution and pricing on this financing which converted almost 28% of our total outstanding debt from a 2-month maturity into a new, five-year financing.  We believe this transaction de-risked our portfolio, while giving us flexibility in the future to broaden our capital structure."

The CMBS Loan is interest-only at an interest rate of 3.74%, has a five-year term and is secured by 368 single-tenant properties. Of these, 223 properties were previously collateral for a loan that had less than two months of term remaining and an effective interest rate of 4.36%. All but one of the remaining properties were part of the borrowing base for AFIN's corporate credit facility. At the closing of the CMBS Loan, an aggregate of approximately $499.0 million of proceeds was used to repay the existing mortgage loan in full and the balance was used to repay amounts outstanding under the Company's corporate credit facility.

About American Finance Trust, Inc.
American Finance Trust, Inc. (Nasdaq: AFIN) is a publicly traded real estate investment trust listed on the Nasdaq focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S. Additional information about AFIN can be found on its website at www.americanfinancetrust.com.

Important Notice
The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words "anticipates," "believes," "expects," "estimates," "projects," "plans," "intends," "may," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company's control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global coronavirus pandemic, including actions taken to contain or treat the coronavirus, on the Company, the Company's tenants and the global economy and financial markets and that the information about second quarter 2020 rent collections includes additional rent collected with respect to April and May as compared to previously reported information due to ongoing collection efforts and second quarter 2020 rent collections may not be indicative of any future period, as well as those risks and uncertainties set forth in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed on February 27, 2020, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed on May 7, 2020 and all other filings with the SEC after that date, as such risks, uncertainties and other important factors may be updated from time to time in the Company's subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.

Contacts:
Investor Relations
investorrelations@americanfinancetrust.com
(866) 902-0063

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SOURCE American Finance Trust, Inc.

FAQ

What financing transaction did American Finance Trust complete?

American Finance Trust completed a $715 million commercial mortgage-backed security financing.

What is the interest rate on the CMBS Loan for American Finance Trust?

The interest rate on the CMBS Loan is 3.74%.

How has the debt maturity changed for American Finance Trust?

The debt maturity for American Finance Trust has been extended from 3.5 years to 5.1 years.

What percentage of American Finance Trust's debt was converted to long-term financing?

About 28% of American Finance Trust's total outstanding debt was converted to a new five-year financing.

How much of the CMBS Loan proceeds was used to repay existing debt?

Approximately $499 million of the CMBS Loan proceeds was used to repay existing mortgage loans in full.