Debt Deals: NRF, MCGC

NorthStar Realty Finance (NRF) announced it completed a three year renewal of its credit facility with Wachovia Bank, a subsidiary of Wells Fargo (WFC), for three years. With the renewal, NorthStar agreed to make 15 million dollar semi-annual reductions of the facility over the three year term, and Wachovia agreed to eliminate margin call provisions as well as fixed charge and recourse debt covenants. Wachovia also gets 2 million warrants to purchase shares of NorthStar at exercise prices ranging from 7.50 to 10.50 per share. The interest rate on the credit facility will be LIBOR plus three and a half percent. Shares of NorthStar were up nearly 5% in Thursday trading.

And MCG Capital (MCGC) announced an amendment package for two series of senior unsecured notes. For the 2005-A series, the maturity date was extended by one year to October 11, 2011 and in exchange the interest rate was increased by one percent. The company also agreed to a 5 million dollar prepayment, made on a pro-rata basis, and agreed to a modification of cash sweep provisions. Going forward, for any unencumbered asset monetizations, cash proceeds will first go toward a 7.5% sweep required by the SunTrust (STI) Warehouse facility, and then a second 45% sweep will go to reduce the principal balance of the unsecured notes. The prior sweep to the unsecured notes was 5%. On Thursday, shares of MCGC were trading up over 7 and a half percent.

The preceeding is a transcript of the MarketNewsVideo.com video published at: http://www.marketnewsvideo.com/?id=200910DebtDeals102909&mv=1.

http://www.marketnewsvideo.com/

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