Question-and-Answer Session
Operator
(Operator Instructions) Our first question will come from the line of David Doty with Citigroup, please proceed.
David Doty - Citigroup
A couple of questions around the line of credit. Have you had active discussions yet and are there any change to terms that you could discuss?
William Bayless
We’ve entered into a term sheet with Keybanc and existing bank group we’re working through the details of it. It’s expected to look very similar from a covenant perspective to the existing revolver, 65% LTV but we are expecting some expansion of the rate by as much as 100 to 200 basis points to different parts of the grid.
The main change in the revolver is that we’re moving from an unsecured facility to a secure facility but as to any impact on the company or anything else it’s very similar.
Michael Bilerman - Citigroup
This is Michael Bilerman speaking; how many assets are you pledging by moving to a secure facility?
William Bayless
There’s eight assets that are in the revolver.
Michael Bilerman - Citigroup
What sort of value book basis?
William Bayless
Basis; are you talking about the cap rate in the revolver?
Michael Bilerman -Citigroup
Yes or just book basis of the assets just to get a sense of?
William Bayless
Sixty-five percent LTV and as far as access to it we should have access to pretty close to the $200 million. As to whether or not that’s a market value well that depends on cap rate assumptions and existing pricing of assets, which is a separate discussion.
David Doty - Citigroup
Then just a couple of questions; given the growing pipeline of ACE projects how are you thinking about how you’re matching up your increased leverage capacity relative to essentially increasing equity components, things like given the timing of the pre-design and the new facility potentially? Can you just share with us your thoughts about the need for equity potentially?
William Bayless
As it relates to equity we talked about this in the past but we always monitor all available capital opportunities; debt, equity, sale of assets, joint venture assets and we’re looking at different parts of that in terms of improving the balance sheet, reduction of risk or as it relates to ACE positioning the company for future growth opportunities.
We can say that the fact that companies are out there accessing both the debt and equity markets is an extremely positive event and does indicate some improvement in the overall capital environment. But as far as it relates to any equity we can’t speak specifically to that.
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