Pope Resources announced an expansion of its credit facilities with Northwest Farm Credit Services (NWFCS) that increases its borrowing capacity from $105 million to $144 million and provides a weighted average net interest rate of 3.6% at closing. The amended facilities include an accordion of up to $50 million that increases the Partnership's capacity to $194 million, as the company says in the press release received by Lesprom Network.
The accordion provides an additional financing option should the Partnership identify value-adding investment opportunities. Before and after closing on the amended facilities, the Partnership had $89.9 million of debt outstanding.
"We are pleased to secure these new facilities as an attractively priced source of capital to finance future growth for the Partnership," said Tom Ringo, President and CEO. "This announcement undergirds our continued confidence in our strategies to build sustainable value for unitholders."
Given the mix of fixed- and floating-rate pricing set at closing, the Partnership's weighted average interest rate will be 3.6%, net of the patronage dividends we expect to receive from NWFCS, a slight improvement to the former facilities. The weighted average maturity of the amended credit facilities is 8.9 years, compared to 5.5 years previously. In addition, the covenant package was amended to be less restrictive.
Upon closing, the amended facilities provide the Partnership with $54.3 million of unused capacity, plus the $50 million accordion. Securing this incremental capacity supports the Partnership's ongoing review of its longer-term opportunities by evaluating its capital allocation strategy, business mix, and organizational structure, all with a focus on delivering increased value to unitholders and narrowing the gap between its trading value and net asset value.
Pope Resources, a publicly traded limited partnership, and its subsidiaries Olympic Resource Management and Olympic Property Group, own and manage 120,000 acres of timberland and 2,100 acres of development property in Washington. In addition, Pope Resources co-invests in and consolidates three private equity timber funds that own 124,000 acres of timberland in Washington, Oregon, and California.
