Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI), a leading commercial mortgage real estate investment trust (REIT), has announced the closure of a $50 million unsecured term loan with two institutional private lending platforms. This funding aims to support the company's future investments and various general corporate purposes.
The unsecured term loan, which matures in October 2028, features a fixed cash interest rate of 9.0% and is interest-only. The company retains the option to prepay the loan partially or in full, subject to applicable prepayment penalties. The full loan amount was drawn at closing to repay existing borrowings on Chicago Atlantic's $110 million senior secured revolving credit facility, as well as for other working capital needs.
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Strong Investment Grade Rating
In conjunction with the loan announcement, Chicago Atlantic disclosed that Egan-Jones has assigned a BBB+ investment grade rating to both the Company and the senior unsecured term loan. This rating reflects the company's creditworthiness and ability to manage its financial obligations effectively.
Peter Sack, co-chief executive officer, noted, "This unsecured note is the latest example of our ability to source accretive financing that further enhances our operational liquidity to pursue additional opportunities within our active originations pipeline." This statement underscores Chicago Atlantic's commitment to maintaining a strong financial position and capitalizing on growth opportunities in the cannabis sector.
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Purpose Of Loan Funds
The $50 million loan is strategically aimed at not only funding new investments but also at addressing ongoing financial obligations. By utilizing a portion of the loan to repay outstanding borrowings from its $110 million revolving credit facility, Chicago Atlantic positions itself to improve its liquidity. This proactive approach allows the company to maintain a robust balance sheet while seeking new opportunities in the market.
