Armada Hoffler Announces Strategic Steps in Executing Its Balance Sheet Management Strategy
Armada Hoffler (NYSE: AHH) has announced several strategic initiatives to reduce its variable rate debt exposure. The company has:
- Executed a $150 million floating-to-fixed rate swap at 2.5% for 2 years, costing $4.6 million
- Repaid $45.6 million of secured variable-rate debt (6.80% weighted average rate)
- Refinanced its Premier mixed-use property with a new $29.4 million agency loan fixed at 5.53% through December 2029
- Reduced its SOFR-referenced revolving credit facility by $19.0 million
Through these actions, AHH is now 100% hedged on its variable rate debt exposure, which it plans to maintain into Q4 2025. The company aims to enhance cash flow stability and better manage interest rate risk.
Armada Hoffler (NYSE: AHH) ha annunciato diverse iniziative strategiche per ridurre la propria esposizione al debito a tasso variabile. L'azienda ha:
- Completato uno swap da tasso variabile a tasso fisso da 150 milioni di dollari al 2,5% per 2 anni, a un costo di 4,6 milioni di dollari
- Estinto 45,6 milioni di dollari di debito garantito a tasso variabile (tasso medio ponderato del 6,80%)
- Rifinanziato la sua proprietà mista Premier con un nuovo prestito da 29,4 milioni di dollari a tasso fisso del 5,53% fino a dicembre 2029
- Ridotto la propria linea di credito revolving referenziata al SOFR di 19,0 milioni di dollari
Grazie a queste azioni, AHH è ora completamente coperta per quanto riguarda l'esposizione al debito a tasso variabile, un obiettivo che intende mantenere fino al quarto trimestre del 2025. L'azienda punta a migliorare la stabilità del flusso di cassa e a gestire meglio il rischio legato ai tassi d'interesse.
Armada Hoffler (NYSE: AHH) ha anunciado varias iniciativas estratégicas para reducir su exposición a la deuda a tasa variable. La empresa ha:
- Ejecutado un swap de 150 millones de dólares de tasa flotante a tasa fija al 2.5% por 2 años, con un costo de 4.6 millones de dólares
- Reembolsado 45.6 millones de dólares de deuda garantizada a tasa variable (tasa promedio ponderada del 6.80%)
- Refinanciado su propiedad de uso mixto Premier con un nuevo préstamo de agencia de 29.4 millones de dólares a tasa fija del 5.53% hasta diciembre de 2029
- Reducido su línea de crédito revolving referenciada al SOFR en 19.0 millones de dólares
Gracias a estas acciones, AHH ahora está 100% cubierta en su exposición a la deuda a tasa variable, lo que planea mantener hasta el cuarto trimestre de 2025. La empresa tiene como objetivo mejorar la estabilidad del flujo de caja y gestionar mejor el riesgo de tasas de interés.
Armada Hoffler (NYSE: AHH)는 가변 금리 부채 노출을 줄이기 위한 여러 전략적 이니셔티브를 발표했습니다. 회사는:
- 2년 동안 2.5%의 고정 금리로 1억 5천만 달러에 대한 변동 금리 스왑을 실행했으며, 비용은 460만 달러입니다.
- 46백만 달러의 담보 변동 금리 부채(가중 평균 금리 6.80%)를 상환했습니다.
- 2029년 12월까지 5.53%의 고정 금리로 2천940만 달러의 에이전시 대출로 Premier 혼합 사용 재산을 재융자했습니다.
- SOFR 기준 회전 신용 시설을 1천900만 달러 줄였습니다.
이러한 조치를 통해 AHH는 현재 가변 금리 부채 노출에 대해 100% 헤지되었습니다. 이는 2025년 4분기까지 유지할 계획입니다. 회사는 현금 흐름의 안정성을 향상하고 금리 위험을 더 잘 관리하는 것을 목표로 하고 있습니다.
Armada Hoffler (NYSE: AHH) a annoncé plusieurs initiatives stratégiques pour réduire son exposition à la dette à taux variable. L'entreprise a:
- Exécuté un swap de 150 millions de dollars de taux flottant à taux fixe à 2,5% pour 2 ans, coûtant 4,6 millions de dollars
- Remboursé 45,6 millions de dollars de dettes garanties à taux variable (taux moyen pondéré de 6,80%)
- Refinancé sa propriété à usage mixte Premier avec un nouveau prêt d'agence de 29,4 millions de dollars à taux fixe de 5,53% jusqu'en décembre 2029
- Réduit sa ligne de crédit renouvelable référencée à la SOFR de 19,0 millions de dollars
Grâce à ces actions, AHH est maintenant complètement couvert pour son exposition à la dette à taux variable, ce qu'elle prévoit de maintenir jusqu'au quatrième trimestre de 2025. L'entreprise vise à améliorer la stabilité des flux de trésorerie et à mieux gérer le risque de taux d'intérêt.
Armada Hoffler (NYSE: AHH) hat mehrere strategische Initiativen angekündigt, um ihre Exposition gegenüber variabel verzinsten Schulden zu reduzieren. Das Unternehmen hat:
- Ein Swapsgeschäft über 150 Millionen Dollar von variabel auf festverzinslich zu 2,5% für 2 Jahre abgeschlossen, was 4,6 Millionen Dollar gekostet hat.
- 36,8 Millionen Dollar an gesicherten variabel verzinsten Schulden (gewichteter Durchschnittszins von 6,80%) zurückgezahlt.
- Seine Premier-Immobilie mit einem neuen Agentendarlehen über 29,4 Millionen Dollar, festverzinst bei 5,53% bis Dezember 2029, refinanziert.
- Seine SOFR-referenzierte revolvierende Kreditlinie um 19,0 Millionen Dollar reduziert.
Durch diese Maßnahmen ist AHH nun zu 100% gegen seine Exposition gegenüber variabel verzinsten Schulden abgesichert, was bis ins vierte Quartal 2025 aufrechterhalten werden soll. Das Unternehmen zielt darauf ab, die Stabilität des Cashflows zu verbessern und das Zinsrisiko besser zu steuern.
- Achieved 100% hedge coverage on variable rate debt exposure
- Secured lower fixed interest rate of 5.53% vs previous 6.4% on Premier property loan
- Increased loan proceeds from $23.4M to $29.4M on Premier property refinancing
- Reduced revolving credit facility exposure by $19.0M
- Incurred $4.6M cost for interest rate swap
- Still carrying significant debt requiring refinancing and hedging
Insights
The comprehensive debt restructuring strategy implemented by Armada Hoffler represents a sophisticated approach to balance sheet optimization in the current high-rate environment. The centerpiece of this strategy - a $150 million floating-to-fixed rate swap at
The refinancing of the Premier property demonstrates astute capital management: securing
The cumulative impact of these moves - including the
These strategic initiatives will likely result in: 1) More predictable debt service costs, enhancing FFO stability 2) Improved debt metrics and potential rating agency views 3) Greater financial flexibility for future growth opportunities 4) Enhanced ability to maintain consistent dividend coverage ratios.
VIRGINIA BEACH, Va., Jan. 29, 2025 (GLOBE NEWSWIRE) -- Armada Hoffler (NYSE: AHH) announced strategic steps in reducing exposure to variable rate debt as the company continues to execute its balance sheet management strategy. Since the end of the third quarter of 2024, the Company has:
- Executed a
$150 million floating-to-fixed rate swap, effective January 2, 2025, with a 2-year term, and a swap fixed rate of2.5% . The Company bought down the rate for a total cost of$4.6 million . With this trade, Armada Hoffler is100% hedged on its variable rate debt exposure, which the Company expects to maintain into the fourth quarter of 2025, based on current variable rate debt levels and existing derivative expirations. - Repaid
$45.6 million of secured variable-rate debt with a weighted average effective interest rate of6.80% . - Refinanced its Premier mixed-use property for greater loan proceeds at a lower fixed rate in November 2024. The new
$29.4 million agency loan is fixed at5.53% interest-only through maturity in December 2029. The previous$23.4 million variable-rate loan had a stated rate of SOFR plus1.55% and an effective rate of6.4% , paid off in September 2024. - Paid down its SOFR referenced revolving credit facility by
$19.0 million through December 31, 2024.
"Armada Hoffler is committed to prudent financial management and continued risk mitigation, and these recent strategic initiatives are key steps in achieving those goals,” said Shawn Tibbetts, Chief Executive Officer and President at Armada Hoffler. “We continue to execute on our strategy to manage interest rate risk and provide greater stability to our cash flow. We believe this enhances our ability to navigate market fluctuations and supports our long-term growth objectives."
About Armada Hoffler
Armada Hoffler (NYSE: AHH) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality office, retail, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. We also provide general construction and development services to third-party clients, in addition to developing and building properties to be placed in our stabilized portfolio. Founded in 1979 by Daniel A. Hoffler, Armada Hoffler has elected to be taxed as a REIT for U.S. federal income tax purposes. For more information visit ArmadaHoffler.com.
Contact:
Chelsea Forrest
Armada Hoffler
Vice President of Corporate Communications and Investor Relations
Email: CForrest@ArmadaHoffler.com
Phone: (757) 612-4248
FAQ
What interest rate did AHH secure in its January 2025 floating-to-fixed rate swap?
How much variable-rate debt did AHH repay in late 2024?
What are the terms of AHH's new Premier property refinancing?
How long will AHH maintain 100% hedge coverage on its variable rate debt?
How much did AHH reduce its revolving credit facility by in 2024?
