UNSECURED BANK CREDIT FACILITIES

12 Months Ended

Dec. 31, 2021

Line of Credit Facility [Abstract]

UNSECURED BANK CREDIT FACILITIES

UNSECURED BANK CREDIT FACILITIES

Until June 29, 2021, EastGroup had $350 million and $45 million unsecured bank credit facilities with margins over LIBOR of 100 basis points, facility fees of 20 basis points and maturity dates of July 30, 2022. The Company amended and restated these credit facilities on June 29, 2021, expanding the capacity to $425 million and $50 million, as detailed below.

The $425 million unsecured bank credit facility is with a group of nine banks and has a maturity date of July 30, 2025. The credit facility contains options for two six-month extensions (at the Company’s election) and a $325 million accordion (with agreement by all parties). The interest rate on each tranche is reset on a monthly basis and as of December 31, 2021, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of December 31, 2021, the Company had $183,000,000 of variable rate borrowings on this unsecured bank credit facility with a weighted average interest rate of 0.875%. The Company has a standby letter of credit of $674,000 pledged on this facility.

The Company’s $50 million unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $425 million facility are exercised. The interest rate is reset on a daily basis and as of December 31, 2021, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of December 31, 2021, the interest rate was 0.876% on a balance of $26,210,000.

For both facilities, the margin and facility fee are subject to changes in the Company’s credit ratings. Moody’s Investors Service has assigned the Company’s issuer rating of Baa2 with a stable outlook. Although the Company’s current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%. The facilities also include a sustainability-linked pricing

component pursuant to which, if the Company meets certain sustainability performance targets, the applicable interest margin will be reduced by one basis point.

Average unsecured bank credit facilities borrowings were $95,629,000 in 2021, $87,095,000 in 2020 and $172,175,000 in 2019, with weighted average interest rates (excluding amortization of facility fees and debt issuance costs) of 1.01% in 2021, 1.86% in 2020 and 3.34% in 2019.  Amortization of facility fees was $751,000, $790,000 and $790,000 for 2021, 2020 and 2019, respectively.  Amortization of debt issuance costs for the Company’s unsecured bank credit facilities was $606,000, $561,000 and $556,000 for 2021, 2020 and 2019, respectively.

The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at December 31, 2021.

See Note 6 for a detail of the outstanding balances of the Company’s Unsecured bank credit facilities as of December 31, 2021 and 2020.