Plaza Las Fuentes
On September 29, 2008, we announced the completion of a $100.0 million financing secured by Plaza Las Fuentes and the Westin® Pasadena Hotel with Eurohypo AG, as Administrative Agent, and Wells Fargo Bank, N.A., as Syndication Agent. Net proceeds totaled approximately $95 million, of which approximately $54 million was used to fund costs associated with the extension of our 3161 Michelson construction loan (as described below), leaving approximately $41 million available for general corporate purposes.
This loan bears interest at (i) LIBOR plus 3.25% or (ii) the base rate, as defined in the loan agreement, plus 2.25%. This loan matures on September 29, 2010, with three one-year extension periods available at our option, subject to certain conditions. As required by the loan agreement, we entered into an interest rate cap agreement which limits the LIBOR portion of the interest rate to 4.75% during the loan term, excluding extension periods. This loan requires principal payments of $100.0 thousand per month during the term of the loan, including any extension periods. Additional principal paydowns will be required if the property’s debt service coverage ratio (as defined in the loan agreement) is less than specified amounts as of the applicable quarterly measurement date.
In connection with this loan, Maguire Properties, L.P. (the “Operating Partnership”), of which we are the sole general partner and hold an approximate 87.8% interest, entered into a guaranty for space leased to East West Bank (90,773 rentable square feet) and Fannie Mae (61,655 rentable square feet). If either tenant defaults on their lease payments, as defined in the loan agreement, our Operating Partnership is required to either post a standby letter of credit or deposit cash with the lender’s agent equal to: (1) $50.00 per square foot of space leased by the defaulting tenant (“Leasing Reserve”), and (2) one year of rent based on the defaulting tenant’s contractual rate (“Interest Reserve”). The Leasing Reserve would be available to us for reimbursement of tenant improvements and leasing commissions incurred to re-lease the defaulted space, and the Interest Reserve would be available for payment of loan interest. We are required to replenish the Interest Reserve if the remaining balance falls below six months worth of rent, provided that, in no event shall the amount so deposited exceed 24 months of rent for the defaulting tenant.
The terms of this loan agreement require our Operating Partnership to comply with financial ratios relating to minimum amounts of tangible net worth, interest coverage, fixed charge coverage and cash liquidity, and a maximum amount of leverage.
This description is qualified in its entirety by reference to the full text of the loan agreement that we will file at a later date.
3161 Michelson
On September 29, 2008, we announced a one-year extension of our 3161 Michelson construction loan with Eurohypo AG, as Administrative Agent, which is now scheduled to mature on September 28, 2009. The amended loan bears interest at (i) LIBOR plus 3.00% or (ii) the base rate, as defined in the original loan agreement, plus 2.25%. There are two one-year extension periods available under this loan, subject to certain conditions. As required by the amended loan agreement, we entered into an interest rate cap agreement which limits the LIBOR portion of the interest rate to 5.50% for 75% of the maximum available amount as of the extension.
