Item 1.01. Entry into a Material Definitive Agreement.
On June 29, 2020, the operating partnership of VEREIT, Inc., a Maryland
corporation ("VEREIT"), VEREIT Operating Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership" and together with VEREIT, the
"Company"), closed its previously announced senior note offering, consisting of
$600.0 million aggregate principal amount of the Operating Partnership's 3.40%
Senior Notes due 2028 (the "Notes"). The Notes were offered at 99.144% of the
principal amount thereof.
Indenture for the Notes
The Operating Partnership issued the Notes pursuant to (1) an Indenture, dated
as of February 6, 2014, by and among the Operating Partnership (f/k/a ARC
Properties Operating Partnership, L.P.), VEREIT (f/k/a American Realty Capital
Properties, Inc.), certain other parties named therein and U.S. Bank National
Association, as trustee (the "Trustee") (the "Base Indenture") and (2) an
Officer's Certificate, dated as of June 29, 2020, amending and supplementing the
Base Indenture and establishing the terms of the Notes (the "Series Officer's
Certificate" and together with the Base Indenture, the "Indenture"). The Notes
mature on January 15, 2028 and bear interest at a rate of 3.40% per year.
Interest on the Notes is payable on January 15 and July 15 of each year,
beginning on January 15, 2021.
The Operating Partnership may redeem the Notes at any time, and from time to
time, at a redemption price of 100% of the principal amount of the Notes
redeemed, plus a "make-whole" redemption premium described in the Indenture,
together with accrued and unpaid interest to, but not including, the redemption
date, except that if the Notes are redeemed on or after November 15, 2027, the
redemption price will be 100% of the principal amount of the Notes redeemed,
together with accrued and unpaid interest to, but not including, the redemption
date.
The Notes are guaranteed on a senior unsecured basis by VEREIT. The Notes and
the guarantee are the senior unsecured obligations of the Operating Partnership
and VEREIT, respectively, and rank pari passu in right of payment with all of
the senior indebtedness of the Operating Partnership and VEREIT, respectively,
and senior in right of payment to all of the subordinated indebtedness of the
Operating Partnership and VEREIT, respectively. The Notes and the guarantee are
effectively subordinated to the future secured indebtedness of the Operating
Partnership and VEREIT, respectively, to the extent of the value of the assets
securing such indebtedness. The Notes will not initially be guaranteed by any of
the Company's subsidiaries, and, therefore the Notes will initially be
structurally subordinated to all liabilities of VEREIT's subsidiaries (other
than the Operating Partnership).
The Indenture contains covenants limiting, among other things, the ability of
the Company and its subsidiaries to incur additional debt and use their assets
to secure debt and the ability of the Company to merge or consolidate with
another company. The Indenture also requires the Company to maintain a specified
ratio of unencumbered assets to unsecured debt. These covenants are subject to a
number of important and significant limitations, qualifications and exceptions.
Events of default under the Indenture include the following with respect to the
Notes: default for 30 days in the payment when due of interest on such series;
default in the payment when due of the principal of, or premium, if any, on such
series; failure to comply with certain covenants in the Indenture with respect
to such series for 60 days after the receipt of notice from the Trustee or
holders of 25% in aggregate principal amount of such series; cessation of the
guarantee of any guarantor in respect of such series required by the Indenture;
acceleration or payment default of recourse debt of VEREIT or any of its
subsidiaries in excess of a specified amount; and certain events of bankruptcy
or insolvency. In the case of an event of default arising from certain events of
bankruptcy or insolvency with respect to VEREIT, the Operating Partnership or a
subsidiary of VEREIT that is a "significant subsidiary" of VEREIT, all Notes
then outstanding will become due and payable immediately without further action
or notice. If any other event of default occurs with respect to the Notes, the
Trustee or holders of 25% in aggregate principal amount of the Notes may declare
all of the Notes to be due and payable immediately.
The foregoing description does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the full text of the Base Indenture
and the Series Officer's Certificate (including the form of Note attached
thereto), which are filed herewith as Exhibits 4.1 and 4.2, respectively, and
incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
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Item 8.01. Other Events.
On June 22, 2020, VEREIT issued notice that it will redeem $150.0 million, plus
accrued and unpaid dividends thereon, of its 6.70% Series F Cumulative
Redeemable Preferred Stock on July 22, 2020. On June 25, 2020, VEREIT purchased
approximately $50.2 million of its 3.75% Convertible Senior Notes due 2020.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Indenture, dated as of February 6, 2014, by and among VEREIT
Operating Partnership, L.P. (f/k/a ARC Properties Operating
Partnership, L.P.), VEREIT, Inc. (f/k/a American Realty Capital
Properties, Inc.), certain other parties named therein and U.S. Bank
National Association, as trustee (the "Trustee") (incorporated by
reference to VEREIT, Inc.'s Current Report on Form 8-K (File
No. 001-35263) filed on February 7, 2014)
4.2 Officer's Certificate, dated as of June 29, 2020
4.3 Form of Note (included in Exhibit 4.2 above)
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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