Credit Facility: Ladder Secures $850M to Cut Debt Costs
Ladder Capital Corp (NYSE: LADR), a leading diversified commercial real estate finance platform, has announced the successful closing and subsequent upsizing of its revolving credit facility (the “Credit Facility”) to $850 million. The Credit Facility includes an “accordion” feature, allowing Ladder to increase total borrowing availability up to $1.25 billion. This Ladder Capital Upsizes $850 Million Credit Facility to Enhance Liquidity and Reduce Debt Costs.
Ladder Capital Corp (“Ladder” or “the Company”), a prominent commercial real estate finance platform, has successfully closed and expanded a new revolving credit facility (“Credit Facility”) with commitments totaling $850 million. This Credit Facility features an “accordion” option that allows Ladder to increase borrowing capacity to as much as $1.25 billion. The new facility replaces Ladder’s previous $324 million revolving credit facility, which had no outstanding balance at the time of the transition.
Strengthened Financial Flexibility
The newly established Credit Facility, which more than doubles Ladder’s prior capacity, comes with significantly lower borrowing costs and favorable terms. It carries a maturity date of December 20, 2028, with options for two six-month extensions at the Company’s discretion. Additionally, the agreement includes a provision that would convert the facility into an unsecured, investment-grade agreement if the Company achieves investment-grade ratings from two major credit rating agencies.
Ladder’s CEO, Brian Harris, emphasized the significance of this development:
“We are pleased to see our strategic plans coming together. Upsizing our revolving credit facility is a crucial step as we continue on our path toward potential investment-grade ratings. This transaction reflects our strong relationships with financial partners, our differentiated financing approach, and our commitment to creating enduring value through a platform rooted in stability, discipline, and resilience.”
The new Credit Facility further aligns with Ladder’s strategy to enhance liquidity and maintain a balanced capital structure. By securing lower margins for borrowings, which are linked to the Company’s credit ratings, Ladder has positioned itself for improved financial flexibility. Presently, the Company holds ratings just below investment grade from Moody’s (Ba1) and Fitch (BB+), both with positive outlooks, and a BB rating from S&P Global.
Participation from Leading Financial Institutions
A total of ten lenders participated in the Credit Facility, underscoring strong market confidence in Ladder’s business model and creditworthiness. JPMorgan Chase Bank, N.A., serves as the Administrative and Collateral Agent for the facility, while JPMorgan, Wells Fargo Securities, Bank of America, M&T Bank, and Société Générale act as Joint Bookrunners and Joint Lead Arrangers. Other notable participants include Barclays, Citibank, Raymond James Bank, and Deutsche Bank, among others.
The syndication of top-tier financial institutions signals a broad endorsement of Ladder’s growth trajectory and operational stability. Harris expressed gratitude for the collaboration, noting, “The success of this transaction reflects our robust partnerships with financial institutions, which are essential to supporting our long-term vision.”
A Path to Investment-Grade Ratings
The upsize of the Credit Facility marks a significant milestone in Ladder’s pursuit of investment-grade ratings. The revised terms of the facility—allowing for automatic conversion to an unsecured agreement upon achieving investment-grade ratings—highlight the Company’s focus on financial discipline and stability.
Moody’s and Fitch currently rate Ladder one notch below investment grade, both with positive outlooks. The improved structure and reduced costs of the new Credit Facility are expected to bolster Ladder’s financial profile, making it well-positioned to secure higher ratings in the near future.
About Ladder Capital Corp
Ladder Capital Corp (NYSE: LADR) is a leading diversified commercial real estate finance platform with $5.4 billion in assets. Established in 2008, Ladder has invested over $46 billion in debt and equity, catering to institutional and middle-market clients. Its primary business involves originating fixed and floating-rate first mortgage loans secured by various commercial property types. Additionally, Ladder owns and operates commercial real estate properties and invests in securities backed by first mortgage loans.
The Company operates with a conservative and durable capital structure, underpinned by internally managed leadership. Members of Ladder’s management team and board of directors collectively own more than 11% of the Company’s equity, making them its largest shareholder. This alignment ensures that the interests of management and stakeholders are closely intertwined.
Ladder’s focus on delivering attractive risk-adjusted returns while preserving shareholder capital has earned it a reputation for stability and resilience. The recent expansion of its Credit Facility exemplifies the Company’s commitment to innovation and long-term value creation in the commercial real estate finance space.
