CTO Realty Growth bolsters balance sheet with $150M term loan

CTO Realty Growth secured $150 million in a financing package, consisting of a new $125 million term loan maturing in 2030 and a $25 million increase to an existing loan maturing in 2029, to retire a $65 million loan early.

The funds will primarily be used to pay off the existing $65 million loan due in March 2026 and to reduce the balance on the company's revolving credit facility.

The term loans will have interest rates linked to the Secured Overnight Financing Rate (SOFR), initially set at approximately 4.2% due to existing swap agreements, but expected to rise to about 4.7% as some agreements mature.

Following the financing announcement, CTO Realty's shares experienced a modest increase of 0.1% in after-hours trading.

Recommendation Rating: Strong Financial Maneuver

CTO Realty Growth (NYSE:CTO) successfully secured $150 million in term loan financing, aimed at retiring an existing $65 million loan ahead of schedule, the company announced on Thursday.

The financing package includes a new $125 million term loan maturing in September 2030, alongside a $25 million increase to the company's current term loan set to mature in September 2029. The funds raised will primarily be used to pay off the $65 million loan due in March 2026, which constitutes a significant portion of CTO’s upcoming maturity obligations, and to lower the balance of its revolving credit facility.

Both term loans will incur interest at a rate based on the Secured Overnight Financing Rate (SOFR), plus a spread that reflects the company’s leverage. At the time of closing, CTO Realty utilized existing SOFR swap agreements, establishing a fixed initial interest rate of approximately 4.2% for both the 2030 and 2029 term loans. As some SOFR swap agreements mature in March 2026, they will be substituted with forward SOFR swap agreements, causing the interest rates for both loans to rise to about 4.7%, based on the current leverage ratio of the company.

Following this announcement, shares of CTO Realty (NYSE:CTO) saw a slight increase of 0.1% in after-hours trading.