Ladder Capital Corp recently closed and subsequently upsized its revolving credit facility to $850 million, a substantial increase from its prior $324 million facility. This new facility, which includes an accordion feature allowing for expansion up to $1.25 billion, has a maturity date of December 20, 2028, with options for two 6-month extensions.
The upsized credit facility is expected to significantly enhance the company's balance sheet liquidity and flexibility, while also reducing its cost of funds due to tighter margins that adjust based on Ladder's credit rating. The agreement is structured to automatically convert to an unsecured investment grade agreement if certain debt instruments achieve investment grade ratings from two agencies.
CEO Brian Harris emphasized that this move is a crucial step in Ladder's strategic path toward potential investment grade ratings. As of the announcement, Ladder was rated Ba1 by Moody's and BB+ by Fitch, both with positive outlooks, positioning the company one notch below investment grade with two agencies.
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