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Empire State Realty Trust Refinances Its Existing Revolving Credit Facility and Term Loan

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Empire State Realty Trust Inc., a leading real estate investment trust with office and retail properties in Manhattan and the greater New York metropolitan area, recently revealed that Empire State Realty OP, LP, its operating partnership, has entered into a new master credit facility in the original principal amount of $1.365 billion, which consists of a $1.1 billion revolving credit facility and a $265 million term loan facility.

According to a prepared statement, the new revolving credit facility replaces the existing credit facility which was due to mature in January 2019 and currently remains undrawn. The term loan facility was borrowed in full at closing and used to repay the existing $265 million term loan due in 2022. The company has the ability to further increase the total capacity of the facility to $1.75 billion, with additional exercises of an accordion option during the term of the new facility.

The revolving credit facility matures on August 29, 2021, and may be extended by two six-month periods at the option of the Company. The term loan facility matures on August 29, 2022.

Initial interest rates on the new facility, which may change based on Company leverage levels, are LIBOR plus 120 basis points for the term loan and LIBOR plus 110 basis points for any drawn portion of the revolving credit facility, a savings of 40 and 5 basis points, respectively, from the prior facilities. In addition, the current annual revolving credit facility fee decreased from 20 basis points to 15 basis points.

David A. Karp, Executive Vice President and Chief Financial Officer, commented, “We are pleased to extend our debt maturities, lower our borrowing costs, add flexibility to our financial covenants and enhance our already strong liquidity position.”

Merrill Lynch, Pierce, Fenner & Smith Inc. and Wells Fargo Securities, LLC are Joint Lead Arrangers and Joint Bookrunners for the new facility with Bank of America, N.A. serving as Administrative Agent. Wells Fargo, National Association and Capital One, National Association serve as Co-Syndication Agents. Capital One, National Association, BMO Harris Bank, N.A., Citizens Bank, National Association and U.S. Bank National Association are Joint Lead Arrangers and Barclays Bank PLC, Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A., are Senior Managing Agents. Other lenders under the facility include Branch Banking & Trust Company and Keybank National Association.