ELS Refinancing Mortgage Loans With Lenders
Equity LifeStyle Properties Inc. (ELS) today (June 3) announced that the company has entered into agreements to obtain $435 million in new mortgage loans from institutional lenders. According to a press release, the loans will be secured by mortgages on 25 manufactured home and RV properties and, in total, are expected to bear a blended interest rate of 4.3% per annum, and to have maturities ranging from 10 to 25 years with a weighted average maturity of approximately 18 years.
ELS said that proceeds from the financing will be used to repay debt with a weighted average effective interest rate of 5.7%. This includes its remaining 2013 debt maturities as well as approximately $102 million maturing in 2014 and approximately $295 million maturing in 2015. The company plans to use available cash to pay approximately $37 million in defeasance costs related to the early repayment of debt. The financing is expected to close in stages beginning in the second quarter of 2013 with the final closing expected to occur in April 2014.
CEO Marguerite Nader stated, “The current financing environment offers an opportunity to obtain long-term financing for our RV and MH assets at historically low interest rates. This transaction allows us to reduce our overall cost of debt to 5.3% and extend our weighted average maturities from 4.5 years to more than 7 years. In addition, through this transaction we expect to restructure our debt maturities so that we have no more than $300 million maturing in any single year going forward.”