IStar Financial Inc., a commercial real-estate lender, is seeking to lower the rate it will pay on a $1.71 billion term loan.
The interest on the debt will be reduced to 3.5 percentage points more than the London interbank offered rate and will be sold at par, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1 percent floor.
JPMorgan Chase & Co., Barclays Plc and Bank of America Corp. are arranging the transaction and commitments are due by 5 p.m. on Feb. 7 in New York, according to the person.
IStar will be paying out the 101 call protection to existing lenders in connection with the refinancing and will be extending the call protection for lenders to Dec. 31, 2013 from Oct. 15, 2013, the company said yesterday in a statement.
The company’s existing term loan, which matures in October 2017, pays interest at 4.5 percentage points more than Libor, with a 1.25 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at 99 cents on the dollar and was quoted at 101.625 cents today, according to prices compiled by Bloomberg.
David DiStaso, chief financial officer of IStar Financial, didn’t immediately respond to an e-mail seeking comment.
IStar was founded in 1993 as part of Starwood Capital Group, Barry Sternlicht’s private-equity firm that specializes in real-estate investments, and it went public in 1998. It provides financing to real estate owners as well as net-lease financing and equity. The company’s two main lines of business are lending and corporate-tenant leasing.