NNN REIT (NYSE: NNN) adds $300M term loan and adjusts SOFR costs
Rhea-AI Filing Summary
NNN REIT, Inc. entered into a new senior unsecured term loan agreement providing $300 million of borrowing capacity during a six-month delayed draw period, with an accordion feature allowing the facility to increase to up to $500 million. The term loan matures on February 15, 2029 and includes two one-year extension options at the company’s discretion.
Borrowings will bear interest at SOFR plus an applicable margin of 0.85% based on current credit ratings, and the company has forward-starting swaps on $200 million that fix SOFR at 3.22% through January 15, 2029. NNN REIT currently has no borrowings outstanding under the term loan and expects to use future proceeds for general corporate purposes. The company also amended its revolving credit agreement to remove a 10 basis point SOFR credit spread adjustment on that facility.
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Insights
New unsecured term loan expands NNN REIT’s flexible funding while maintaining standard REIT-style covenants.
NNN REIT secured a senior unsecured term loan providing $300 million in delayed-draw capacity, expandable to $500 million, maturing in 2029 with two one-year extension options. Pricing at SOFR plus a margin currently at 0.85%, combined with forward-starting swaps on $200 million fixing SOFR at 3.22% through January 15, 2029, helps define the company’s future borrowing cost on a portion of this debt.
The facility includes leverage, fixed charge coverage and secured debt ratio covenants and cross-defaults that are described as customary for this type of agreement, indicating terms similar to typical REIT bank financing. No amounts are currently drawn, and stated uses are general corporate purposes, giving management flexibility in how to deploy this capacity. The parallel amendment removing a 10 basis point SOFR credit spread adjustment on the revolving credit facility changes the benchmark rate used to calculate interest there.
8-K Event Classification
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
NNN REIT, Inc. (the “Company”), entered into a Term Loan Agreement dated as of December 17, 2025 (the “Term Loan”), with the lenders from time to time party thereto and with Wells Fargo Bank, National Association acting as the Administrative Agent.
The Term Loan provides for (i) $300 million of senior unsecured borrowing capacity during a six-month delayed draw commitment period and (ii) an accordion option to increase the aggregate facility size to up to $500 million. The Term Loan maturity date is February 15, 2029, subject to two one-year extension options exercisable at the option of the Company. Based on the Company’s current credit ratings, borrowings under the Term Loan will bear interest at an effective rate of SOFR plus the applicable margin of 0.85% (for SOFR borrowings); however, such applicable margin may change based on the Company’s credit ratings. In anticipation of the Term Loan, the Company entered into forward starting swaps totaling $200 million that fix SOFR at 3.22% through January 15, 2029.
The Company expects to use future proceeds from the Term Loan for general corporate purposes. No funds have been drawn on the Term Loan to date.
The Term Loan contains certain (a) restrictive covenants, including, but not limited to, restrictions on the incurrence of additional indebtedness and liens, the ability to make certain payments and investments and the ability to enter into certain merger, consolidation, asset sale and affiliate transactions, and (b) financial maintenance covenants, including, but not limited to, a maximum leverage ratio, a minimum fixed charge ratio and a maximum secured indebtedness ratio. The Term Loan also contains representations and warranties, affirmative covenants and events of default, including certain cross defaults with the Company’s other indebtedness, customary for an agreement of its type. As is customary, certain events of default could result in an acceleration of the Company’s obligations under the Term Loan.
The foregoing description of the Term Loan is not, and does not purport to be, complete and is qualified in its entirety by reference to a copy of the Term Loan filed as Exhibit 10.1 hereto and incorporated herein by reference.
Additionally, the Company entered into that certain First Amendment to Third Amended and Restated Credit Agreement, dated as of December 17, 2025 (the “Revolving Credit Agreement Amendment”), with Wells Fargo Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein to, among other things, remove the 10 basis point SOFR credit spread adjustment.
The foregoing summary of the Revolving Credit Agreement Amendment is not an exhaustive description of the terms of the Revolving Credit Agreement Amendment, which is attached hereto as Exhibit 10.2, and such summary is qualified in its entirety by reference to the attached Revolving Credit Agreement Amendment.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this Item 2.03 is included in Item 1.01 above and is incorporated herein by reference.
Item 9.01. |
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Financial Statements and Exhibits. |
(d) Exhibits. |
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10.1 |
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Term Loan Agreement, dated as of December 17, 2025, by and among NNN REIT, Inc., Wells Fargo Bank, National Association as Administrative Agent, and a syndicate of lenders named therein. |
10.2 |
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First Amendment to Third Amended and Restated Credit Agreement, dated as of December 17, 2025, by and among NNN REIT, Inc., Wells Fargo Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein. |
104.1 |
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Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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NNN REIT, Inc. |
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Dated: December 17, 2025 |
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By: |
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/s/ Vincent H. Chao |
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Vincent H. Chao |
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Executive Vice President and Chief Financial Officer |
FAQ
What new debt facility did NNN REIT (NNN) enter into?
NNN REIT, Inc. entered into a new senior unsecured Term Loan Agreement providing $300 million of borrowing capacity during a six-month delayed draw period.
How large can NNN REIT’s new term loan grow and when does it mature?
The term loan includes an accordion feature allowing the facility size to increase to up to $500 million and has a stated maturity date of February 15, 2029, with two additional one-year extension options.
What interest rate will NNN REIT (NNN) pay on the new term loan?
Based on NNN REIT’s current credit ratings, borrowings under the term loan will bear interest at an effective rate of SOFR plus an applicable margin of 0.85% for SOFR borrowings.
How does NNN REIT plan to use proceeds from the new term loan?
NNN REIT expects to use future proceeds from the term loan for general corporate purposes, and as of the report date, no funds had been drawn.
What change was made to NNN REIT’s revolving credit agreement?
The company entered into a First Amendment to its Third Amended and Restated Credit Agreement to remove a 10 basis point SOFR credit spread adjustment applicable to that revolving credit facility.
What key covenants are included in NNN REIT’s new term loan?
The term loan includes restrictive covenants on additional indebtedness, liens, certain payments and transactions, as well as financial maintenance covenants such as maximum leverage, minimum fixed charge coverage, and a maximum secured indebtedness ratio, along with customary events of default and cross defaults.