DCT » Topics » Financing

This excerpt taken from the DCT 10-K filed Mar 16, 2006.

Financing

Lines of Credit—In December 2005, we amended our existing $225 million senior secured revolving credit facility such that it is now a $250 million unsecured facility with a syndicated group of banks led by JP Morgan Securities. The facility matures in December 2008 and has provisions to increase its total capacity to $400 million. At our election, the facility bears interest either at LIBOR plus 0.875% to 1.375%, depending upon our consolidated leverage, or at prime (7.25% at December 31, 2005) and is subject to an annual 0.25% facility fee. The facility contains various covenants including financial covenants with respect to consolidated leverage, net worth, unencumbered assets, interest and fixed charge coverage and secured debt to secured asset value. As of December 31, 2005, we were in compliance with all these covenants. As of December 31, 2005, we did not have an outstanding balance on this facility.

Contemporaneously with the amendment of our secured credit facility, we entered into a $40 million senior secured revolving credit facility with a separate syndicated bank group led by JP Morgan Securities pursuant to which the bank group has agreed to advance funds to our partnership and third-party investors in our partnership’s private placement using undivided tenancy-in-common interests in our buildings as collateral. The facility matures in December 2008 and has provisions to increase its total capacity to $80 million. At our election, the facility bears interest either at LIBOR plus 1.25% to 1.75%, depending upon our consolidated leverage, or at prime (7.25% at December 31, 2005) and is subject to an unused facility fee. The facility contains various covenants including financial covenants with respect to consolidated leverage, net worth, interest and fixed charge coverage and secured debt to secured asset value. As of December 31, 2005, we were in compliance with all these financial covenants. According to the terms of the facility, in addition to our borrowings, any loans made to third-party investors in our partnership’s private placement reduce the total capacity available from the facility. As of December 31, 2005, approximately $14.1 million of loans had been advanced to such third parties and we had an outstanding balance of $16,000.

Debt Issuances—In September 2005, we issued $3.9 million of secured, non-recourse debt with a fixed interest rate of 4.97% which matures in October 2013. The underlying note requires interest only payments until April 1, 2007 at which time monthly payments of principal and interest are required. In January 2005, we issued $57.0 million of secured, non-recourse debt with a stated fixed interest rate of 4.40% which matures in 2010. The underlying notes required monthly payments of interest only until January 1, 2006 at which time monthly payments of principal and interest are required. In December 2004, we issued $55.0 million of secured, non-recourse debt. The debt has a stated fixed interest rate of 5.31% and matures in 2015 and, prior to December 31, 2005, the underlying notes required monthly payments of interest only and thereafter monthly payments of principal and interest are required.

Debt Assumptions—During the year ended December 31, 2005, we assumed nineteen secured, non-recourse notes, totaling $434.1 million in conjunction with the acquisition of certain properties (see Note 3-Real Estate to the consolidated financial statements). These assumed notes bear interest at fixed and variable rates ranging from 4.72% to 8.50% and require monthly payments of either interest, or principal and interest. The maturity dates of such assumed notes range from February 2008 to November 2022. We assumed six of these notes totaling $308.8 million in connection with our merger with Cabot on July 21, 2005. Pursuant to SFAS No. 141, “Business Combinations” (“SFAS No. 141”), the difference between the fair value and face value of these assumed notes at the date of acquisition resulted in a premium of approximately $8.7 million, which is amortized to interest expense over the remaining life of the underlying notes.

 

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Table of Contents

During the year ended December 31, 2004, we assumed five secured, non-recourse notes totaling $45.6 million, in conjunction with the acquisition of five properties with stated interest rates ranging from 6.22% to 7.21%. All of these notes bear interest at a fixed rate and require monthly payments of principal and interest. They have maturity dates ranging from 2007 to 2012. Pursuant to SFAS No. 141, the difference between the fair value and face value of these notes at the date of acquisition resulted in a premium of approximately $2.9 million, which is amortized to interest expense over the remaining life of the underlying notes.

As of December 31, 2005, the total historical cost of our properties was approximately $2.0 billion and the total historical cost of properties securing our fixed rate mortgage debt was approximately $1.2 billion. Our debt has various covenants and management believes it was in compliance with all of these covenants at December 31, 2005.

The following table sets forth the scheduled maturities of our debt, excluding unamortized premiums, as of December 31, 2005 (amounts are in thousands).

 

Year

   Fixed Rate
Mortgage Debt
   Senior
Secured Revolving
Credit Facility
   Total

2006

   $ 6,462    $ —      $ 6,462

2007

     7,112      —        7,112

2008

     69,240      16      69,256

2009

     6,711      —        6,711

2010

     57,224      —        57,224

2011

     228,385      —        228,385

2012

     182,658      —        182,658

2013

     21,130      —        21,130

2014

     2,486      —        2,486

2015

     43,860      —        43,860

Thereafter

     7,115      —        7,115
                    

Total

   $ 632,383    $ 16    $ 632,399
                    
This excerpt taken from the DCT 10-K filed Mar 16, 2005.

Financing

        In December 2004, we issued $55.0 million of secured, non-recourse debt. The debt has a stated fixed interest rate of 5.31% and matures in 2015. The underlying notes require monthly payments of interest only for one year and monthly payments of principal and interest thereafter. In December 2003, we issued $40.5 million of secured, non-recourse debt with a fixed interest rate of 5.00%, maturing in September 2011 and requiring monthly payments of principal and interest. During 2004, in conjunction with the acquisitions of Parkwest A, B and G, Mid-South Logistics Center V and Sky Harbor Transit Center, we assumed five secured, non-recourse notes totaling $45.6 million with stated interest rates ranging from 6.22% to 7.21%. All of these notes bear interest at a fixed rate and require monthly payments of principal and interest. They have maturity dates ranging from 2007 to 2012. Pursuant to SFAS No. 141, the difference between the fair value and face value of these notes at the date of acquisition resulted in a premium of approximately $2.9 million, which will be amortized to interest expense over the remaining life of the underlying notes.

        In October 2003, we entered into a $50.0 million secured revolving credit facility with JP Morgan Securities (formerly BankOne). In February 2004, the credit facility was amended and restated into a syndicated credit facility maturing in February 2007 and expanded commitments were received in July 2004 to reach its current capacity of $225.0 million. The credit facility currently bears interest at either LIBOR plus 1.125% to 1.500%, depending upon the level of our leverage, or, at our election, the prime rate and is subject to an annual 0.250% facility fee. This credit facility contains various covenants including financial covenants regarding net worth, interest and fixed charge coverage and consolidated leverage.

        As of December 31, 2004, the total historical cost of all of our properties was approximately $754.1 million and the total historical cost of all properties securing our fixed rate mortgage debt and secured credit facility was approximately $310.6 million and $237.7 million, respectively. Our debt has

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various covenants and we believe we were in compliance with all of these covenants at December 31, 2004.

        The following table sets forth the scheduled maturities of our debt, excluding unamortized premiums, as of December 31, 2004.

Year

  Fixed Rate
Mortgage Debt

  Secured Credit
Facility

  Total
2005   $ 1,379,088   $   $ 1,379,088
2006     2,596,045         2,596,045
2007     2,837,480     4,000     2,841,480
2008     28,793,359         28,793,359
2009     2,306,402         2,306,402
2010     2,432,415         2,432,415
2011     37,407,982         37,407,982
2012     16,307,309         16,307,309
2013     1,563,727         1,563,727
2014     1,648,811         1,648,811
  Thereafter     42,963,821         42,963,821
   
 
 
  Total   $ 140,236,439   $ 4,000   $ 140,240,439
   
 
 

EXCERPTS ON THIS PAGE:

10-K
Mar 16, 2006
10-K
Mar 16, 2005
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