Howard Hughes Corp. has closed on a $700 million loan from Wells Fargo that will provide more permanent financing for some of the commercial developer’s biggest projects, including the redevelopment of downtown Columbia.
The financing includes a $615 million term loan and an $85 million revolver. A revolving loan is similar to a credit card where the borrower can drawdown, repay and redraw funds. To secure the lending, Dallas-based Howard Hughes put up its portfolio of properties in Columbia, Honolulu and The Woodlands, Texas as collateral.
The move helps Howard Hughes (NYSE: HHC) manage its balance sheet. By converting short-term debt into longer-term loans, Howard Hughes will have more financial flexibility and lower its average cost of capital, CFO David R. O’Reilly said in a statement.
“By reducing our cost of funding, extending our maturity and adding a revolving component, this financing exemplifies our commitment to further improving our credit metrics,” O’Reilly said.
