Sovran Self Storage hiked its earnings forecast for this year by a little more than 1 percent after the Amherst self-storage facility operator reduced its interest expense by $4.1 million a year by refinancing its debt.
Sovran said it now expects its funds from operations this year to range between $3.59 and $3.63 per share, up from its forecast at the beginning of last month that it would earn $3.54 to $3.59 per share in 2013.
Most of the increased earnings that Sovran is anticipating will come from the interest savings it expects to reap from a new $500 million debt package that will allow the company to refinance much of its existing borrowings at a lower interest rate.
“This financing package extends our debt maturity dates, reduces our effective borrowing costs and provides us with the capacity and flexibility we need to grow our business,” said Andrew J. Gregoire, Sovran’s chief financial officer, in a statement.
M&T Bank was the lead lender in a syndicate of 11 banks that provided the Sovran financing, which will extend the terms of the company’s borrowings through 2018 and 2020, depending on the type of debt.