NETSTREIT Corp., announced the closing of an inaugural $600 million sustainability-linked senior unsecured credit facility, consisting of a $400 million senior unsecured revolving credit facility and a new $200 million senior unsecured term loan, with an additional $400 million accordion feature. The Revolver refinanced and upsized NTST’s existing $250 million senior unsecured revolving credit facility, which was set to mature in December 2023. The Revolver will mature in August 2026 (4 year term), with the option available to extend the maturity for an additional year, while the Term Loan will mature in February 2028 (5.5 year term). The Term Loan will be fully drawn at close and hedged through its term with an all-in rate of 3.88%. The Company’s existing $175 million senior unsecured term loan that is fully hedged at an all-in rate of 1.36% will remain outstanding through maturity in December 2024.

In addition to enhancing the borrowing capacity of the Company and extending the term on the Revolver, the Credit Facility also made structural changes to certain financial covenants, reduced the capitalization rate from 7.25% to 6.50%, and transitioned the company from LIBOR to SOFR borrowings. In alignment with the Company’s ESG goals and focus on emissions reduction, the Credit Agreement contains sustainability-linked pricing terms pursuant to which the Company will receive pricing adjustments based on its performance against a sustainability performance target focused on the portion of the Company’s annualized based rent attributable to tenants with commitments or quantifiable targets for reducing GHG emissions in accordance with the standards of the Science Based Targets initiative (“SBTi”).

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“We are pleased with the closing of our Credit Facility, featuring the most innovative ESG-focused financing approach that any retail net lease company has undertaken. The Credit Facility is our largest financing to date, which along with the equity raise executed last week, provides significant liquidity to facilitate our ability to expand our growing portfolio of high-quality assets,” said Andrew Blocher, Chief Financial Officer of NETSTREIT.

PNC Capital Markets LLC, U.S. Bank, National Association, and Wells Fargo Securities, LLC acted as Joint Bookrunners and Joint Lead Arrangers for the Credit Facility. PNC Bank, National Association serves as Administrative Agent and Wells Fargo, National Association and US Bank, National Association serve as Co-Syndication Agents. Capital One, National Association, The Huntington National Bank, Regions Bank, TD Bank, N.A., The Bank of Nova Scotia, and Truist Bank serve as Co-Documentation Agents. Citizens Bank, National Association, Comerica Bank, and Associated Bank, National Association also participated in the Credit Facility. PNC Capital Markets LLC acted as advisor and sole Sustainability Structuring Agent.

Source: NETSTREIT Corporation