>>BALTIMORE, May 7 /PRNewswire-FirstCall/ -- Guilford Pharmaceuticals Inc. (Nasdaq: GLFD - News) today announced it has entered into an $18.8 million term loan with Wachovia Bank in order to restructure the synthetic lease on the Company's Research and Development facility located in Baltimore, Maryland. The synthetic lease was established in 1998 to fund construction of the Company's Research and Development facility, which was completed in June 1999. Under the provisions of the synthetic lease, Guilford had been required to maintain $40 million in unrestricted cash and approximately $13.8 million in restricted cash.
Under the terms of the loan, the Company has borrowed $18.8 million from Wachovia Bank and used these funds to purchase the Guilford Realty Trust, which owns the Research and Development facility. The terms of the loan require the Company to repay principal based upon a twenty-year amortization, together with interest that has been effectively fixed at 5.36% per year. Additionally, the Company is only required to maintain restricted cash equal to the outstanding principal balance of the loan, and will no longer be required to maintain an additional $40 million of unrestricted cash and equivalents.
"By completing this financing, we've accomplished two major objectives," remarked Andrew R. Jordan, Executive Vice President and Chief Financial Officer of Guilford. "First, we have removed a $40 million cash covenant previously required under our prior financing arrangement, essentially providing an additional $40 million of working capital. Second, it enables us to consolidate the associated asset and liability on our balance sheet beginning with our second quarter 2003 financial statements."<<
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