NNN REIT, INC. ANNOUNCES EXPANDED $1.2 BILLION UNSECURED CREDIT FACILITY

Rhea-AI Summary

NNN REIT, Inc. increases unsecured credit facility to $1.2 billion, providing financial flexibility for acquisition opportunities.

Positive

• NNN REIT, Inc. amended its unsecured bank credit facility to increase borrowing capacity from $1.1 billion to $1.2 billion.
• The amended facility matures in April 2028, with options to extend to April 2029, and includes an accordion feature to expand up to $2.0 billion.
• Wells Fargo Bank and Bank of America served as Joint Lead Arrangers and Joint Bookrunners on the credit facility, with other major banks participating.
• The expanded facility enhances NNN REIT's financial flexibility for potential acquisitions, supporting its track record of 34 consecutive annual dividend increases.
• NNN REIT focuses on high-quality retail properties with long-term, net leases, owning 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet.
• For more information, visit NNN REIT's website.

Negative

• None.

Financial Analyst

The expansion of NNN REIT's unsecured credit facility from $1.1 billion to $1.2 billion is indicative of the trust's proactive financial management strategy, aiming to fortify its liquidity and support its acquisition-driven growth model. Notably, the option to extend the facility's maturity to April 2029 provides a cushion against potential short-term liquidity crunches. However, it's the accordion feature that is particularly noteworthy, potentially ramping up the facility size to $2.0 billion if tapped. This speaks volumes about the company's ambition and the flexibility it desires in pursuing aggressive expansion or cushioning against unforeseen market disruptions.

Given NNN's track record of consistent annual dividend increases, the expanded credit line might reassure investors about the REIT's commitment to financial stability and sustained growth. While the unchanged material loan provisions suggest a status quo in terms of cost of capital, the overall enhancement of the credit facility can be seen as a strategic move to underpin the company's long-term investment thesis.

Real Estate Market Analyst

Considering NNN REIT's portfolio, which spans across 49 states with significant gross leasable area, the expanded credit facility aligns with the sector's need for flexibility and liquidity in managing large-scale real estate assets. The retail property market, often characterized by long-term, net leases, requires a buffer against the cyclicality of retail business and consumer spending patterns. NNN REIT's strategy to maintain a weighted average remaining lease term of over 10 years positions it favorably within the industry, balancing risk and stability.

However, one must consider the larger economic context, such as interest rate trends and consumer spending shifts, which directly influence retail real estate dynamics. Investors should assess how NNN REIT's financial strategy meshes with these macroeconomic factors to evaluate the potential impact on the company's performance and their investment.

ORLANDO, Fla., April 16, 2024 /PRNewswire/ -- NNN REIT, Inc. (NYSE: NNN), a real estate investment trust, today announced the amendment of its unsecured bank credit facility. The amendment increases the available borrowing capacity under the credit facility from $1.1 billion to $1.2 billion. The amended facility matures April 2028, with options to extend maturity to April 2029. All other material loan provisions, including pricing, are unchanged. The amended facility also includes an accordion feature to increase the facility size up to $2.0 billion.

Wells Fargo Bank, National Association, and Bank of America, N.A., served as the Joint Lead Arrangers and Joint Bookrunners on the credit facility with Wells Fargo Bank acting as the Administrative Agent and Bank of America acting as the Syndication Agent. Joint Lead Arrangers and Documentation Agents were PNC Bank, National Association, Royal Bank of Canada, TD Bank, N.A., Truist Bank and U.S. Bank National Association. Senior Managing Agents were Morgan Stanley Bank, N.A., Mizuho Bank, Ltd., and Sumitomo Mitsui Banking Corporation. The other bank participant was Raymond James Bank.

"We greatly appreciate the continuing support of our bank group and the confidence they have in our business," said Kevin B. Habicht, Executive Vice President and CFO. "The expanded facility gives us significant financial flexibility and enhances our ability to take advantage of acquisition opportunities which helps us perpetuate NNN's track record of 34 consecutive annual dividend increases."

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. For more information on the company, visit www.nnnreit.com.

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SOURCE NNN REIT, Inc.

FAQ

What is the new borrowing capacity of NNN REIT's unsecured credit facility?

NNN REIT's unsecured credit facility has been increased from $1.1 billion to $1.2 billion.

When does the amended credit facility mature?

The amended credit facility matures in April 2028, with options to extend to April 2029.

Which banks were involved in arranging the credit facility for NNN REIT?

Wells Fargo Bank and Bank of America served as Joint Lead Arrangers and Joint Bookrunners on the credit facility.

How many properties does NNN REIT own as of December 31, 2023?

As of December 31, 2023, NNN REIT owned 3,532 properties in 49 states.

What type of properties does NNN REIT primarily invest in?

NNN REIT primarily invests in high-quality retail properties subject to long-term, net leases.