BlackRock Monticello Debt REIT Secures Equity, Financing Investments

BlackRock Monticello Debt Real Estate Investment Trust, or BlackRock Monticello Debt REIT – a private placement real estate investment trust which entered the market last fall – has significantly bolstered its financial position, announcing equity investments and the execution of a revolving credit facility and a repurchase agreement. According to the company, these activities are to enhance the company’s capacity for continued growth and investment in the real estate debt market.

First, BlackRock Monticello Debt REIT disclosed its first sale of unregistered Class E shares for an aggregate purchase price of $6.5 million pursuant to the previously disclosed initial sponsor investments. The 260,000 Class E shares were issued to its sponsor investors, BlackRock Financial Management Inc. as adviser, and Monticello Capital Partners LLC.

With the previously disclosed subscription agreements:

• The BlackRock adviser committed to purchase not less than $50 million in Class E shares; and
• Monticello Capital Partners committed to purchase not less than $3.25 million in Class E shares.

The shares were issued at a price of $25.00 per share, equal to the company’s most recently determined net asset value for its Class E shares.

In addition, the REIT entered into a revolving credit agreement with JPMorgan Chase Bank N.A., or JPM, as the lender. This facility provides for revolving loans up to a maximum aggregate availability of nearly $43.9 million. The credit line is secured by outstanding capital commitments from the BlackRock adviser.

The credit agreement allows for potential increases in the maximum availability, subject to JPM’s consent. However, outstanding obligations under the facility cannot exceed 90% of the adviser’s total uncalled capital commitments. Funds borrowed under this agreement can be used for any purpose permitted under the company’s constituent documents. The facility matures in May 2026, with an option for a 12-month extension, pending JPM’s approval.

Interest on advances will generally be based on the term secured overnight financing rate plus 1.95% per annum. Additionally, the company will pay a quarterly commitment fee of 0.3% per annum on the daily unused amount of the commitment. The agreement includes customary representations, warranties, covenants, and events of default for such a facility.

Finally, the company’s financing subsidiary, BLKM I, LLC, entered into a master repurchase agreement and securities contract with Natixis, New York Branch.

This agreement facilitates the acquisition of eligible loans by BLKM I, providing for initial asset purchases by Natixis for an amount of $150 million. This amount can be increased to $300 million at Natixis’s sole discretion.

Advances under this agreement will accrue interest at a per annum rate equal to the term SOFR for a one-month period, plus a margin agreed upon for each transaction. The company will also pay a fee of 12.5 basis points on the amount funded with each draw. The initial maturity date for the repurchase agreement is May 23, 2028, with potential extensions subject to certain conditions.

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