Real estate investment trust HRPT Properties Trust (HRP.N) said it closed a new mortgage financing for $175 million, secured by one of its Philadelphia properties.

Interest for the first seven years of the 10-year loan has been fixed by a simultaneous hedge transaction that sets the rate at about 5.66 percent per year, the Newton, Massachusetts-based REIT said in a statement.

The office-focused REIT said the interest for the remaining period is payable at a spread over Libor and no principal amount is required to be paid for the first three years.

The company said it would use the proceeds to reduce debt under its revolving credit facility.

In its third-quarter earnings conference call in November, HRPT Properties said it has about $2.8 billion of outstanding debt, representing about 47 percent of its total assets. It has no significant debt maturities until 2011.

U.S. commercial real estate is slowly coming out of its worst slump since the early 1990s, which saw financing drying up completely as banks, saddled with high levels of debt, shunned would-be borrowers.

The latest loan and related interest rate hedge were provided by PB Capital Corp and its affiliates and Westdeutsche ImmobilienBank AG [WDLGW.UL], HRPT said.

Shares of the company were up 2 percent at $6.34 in morning trade Friday on the New York Stock exchange. They touched a high of $6.44 earlier in the session. (Reporting by Biswarup Gooptu in Bangalore; Editing by Gopakumar Warrier) ((biswarup.gooptu@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: biswarup.gooptu.reuters.com@reuters.net))

Mortgage