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JERICHO, N.Y. -- Getty Realty Corp. extended two bank loans to 2013. The real estate investment trust, which owns and leases 1,149 properties, extended the terms of $175 million it borrowed from J.P. Morgan Chase Bank N.A., as well as another $25-million loan from TD Bank N.A.
Now, the $200 million worth of loans will expire in March 2013.
David Driscoll, Getty Realty's CEO, said the loan extensions are crucial for the company as it attempts to reposition Getty Petroleum Marketing Inc. (GPMI) assets following the latter's bankruptcy, filed on Dec. 5.
"We are quite pleased that [Getty Realty] secured an extension of its credit agreement and term loan with its banking group," said Driscoll. "The extension provides Getty [Realty] with financial flexibility as it begins to execute on its strategy of repositioning the Getty Marketing [GPMI] assets to stabilize cash flow. Given the tumultuous events [of] the past six months, we view the securing of these agreements as a vote of confidence from our lenders about the underlying value of our portfolio and management strategy."
As CSNews Online reported on Friday, Getty Realty and GPMI have come to a rent payment agreement intended to avoid lengthy and costly litigation. The agreement, called a stipulation, has been struck between Getty Realty, GPMI and the Official Committee of Unsecured Creditors. The stipulation will not become official unless agreed upon by the U.S. Bankruptcy Court, Southern District of New York. A hearing on the matter will take place April 2.
Under the terms of its loan extensions, Getty Realty said it does need to make some concessions to the banks holding its debt. It is now subject to the maintenance of minimum cash balances, as well as other covenants that could restrict its ability to incur debt and pay dividends.
In addition, the new loan terms with J.P. Morgan and TD Bank could place restrictions on Getty Realty's use of proceeds from the issuance of debt or equity, and the sale of properties.