Item 1.01 Entry into a Material Definitive Agreement.
On June 22, 2021, Extra Space Storage LP (the "Operating Partnership"), the
operating partnership subsidiary of Extra Space Storage Inc. (the "Company"),
entered into a second amended and restated credit agreement (the "Credit
Agreement") with (i) certain lenders named therein, (ii) U.S. Bank National
Association, as administrative agent, (iii) the following co-syndication agents:
Bank of America, N.A. and Wells Fargo Bank, National Association, with respect
to the Revolving Credit Facility and the Tranche 1 Term Loan Facility (each as
defined below), TD Bank, N.A., Wells Fargo Bank, National Association and PNC
Bank, National Association, with respect to the Tranche 2 Term Loan Facility (as
defined below), PNC Bank, National Association, with respect to the Tranche 3
Term Loan Facility (as defined below), TD Bank, N.A., with respect to the
Tranche 4 Term Loan Facility (as defined below) and Bank of America, N.A. and
Wells Fargo Bank, National Association, with respect to the Tranche 5 Term Loan
Facility (as defined below), (iv) the following co-documentation agents: TD
Bank, N.A., PNC Bank, National Association, Bank of the West, BMO Harris Bank
N.A., JPMorgan Chase Bank, N.A., Regions Bank and Citibank, N.A., with respect
to the Revolving Credit Facility, TD Bank, N.A., Bank of the West, BMO Harris
Bank, N.A., JPMorgan Chase Bank, N.A. and Regions Bank, with respect to the
Tranche 1 Term Loan Facility and Bank of the West, BMO Harris Bank, N.A. and
Fifth Third Bank, National Association, with respect to the Tranche 5 Term Loan
Facility and (v) the following joint lead arrangers and book runners: U.S. Bank
National Association, BofA Securities, Inc. and Wells Fargo Securities, LLC, as
joint lead arrangers and joint bookrunners with respect to the Revolving Credit
Facility and the Tranche 1 Term Loan Facility, U.S. Bank National Association,
Wells Fargo Securities, LLC, TD Bank, N.A. and PNC Capital Markets LLC, as joint
lead arrangers with respect to the Tranche 2 Term Loan Facility and U.S. Bank
National Association, Wells Fargo Securities, LLC and PNC Capital Markets LLC,
as joint book runners with respect to the Tranche 2 Term Loan Facility, U.S.
Bank National Association, PNC Capital Markets LLC and TD Bank, N.A., as joint
lead arrangers with respect to the Tranche 3 Term Loan Facility and U.S. Bank
National Association, as sole book runner with respect to the Tranche 3 Term
Loan Facility, U.S. Bank National Association and TD Bank, N.A., as joint lead
arrangers with respect to the Tranche 4 Term Loan Facility and U.S. Bank
National Association as sole book runner with respect to the Tranche 4 Term Loan
Facility, and U.S Bank National Association, BofA Securities, Inc., Wells Fargo
Securities, LLC, Bank of the West, BMO Harris Bank N.A. and Fifth Third Bank,
National Association, as joint lead arrangers with respect to the Tranche 5 Term
Loan Facility and U.S. Bank National Association as sole book runner with
respect to the Tranche 5 Term Loan Facility. The Company joined in the Credit
Agreement for certain limited purposes as set forth therein. The Credit
Agreement amended and restated in its entirety an existing credit agreement,
dated as of December 7, 2018, as amended as of July 1, 2019, December 20, 2019
and February 12, 2021, by and among the Operating Partnership, U.S. Bank
National Association, as administrative agent, and the lending institutions
listed on the signature pages thereof and joined in by the Company for certain
limited purposes as set forth therein.
The Credit Agreement provides for aggregate borrowings of up to $2.795 billion,
consisting of a senior unsecured revolving credit facility of $1.25 billion, due
June 20, 2025 (the "Revolving Credit Facility"), a senior unsecured term loan of
$400.0 million, due January 31, 2027 (the "Tranche 1 Term Loan Facility"), a
senior unsecured term loan of $220.0 million, due October 13, 2026 (the "Tranche
2 Term Loan Facility"), a senior unsecured term loan of $245.0 million, due
January 30, 2025 (the "Tranche 3 Term Loan Facility"), a senior unsecured term
loan of $255.0 million, due June 29, 2026 (the "Tranche 4 Term Loan Facility"),
and a senior unsecured term loan of $425.0 million, due February 12, 2024 (the
"Tranche 5 Term Loan Facility" and, together with the Tranche 1 Term Loan
Facility, the Tranche 2 Term Loan Facility, the Tranche 3 Term Loan Facility and
the Tranche 4 Term Loan Facility, the "Term Loan Facilities" and, together with
the Revolving Credit Facility, the "Credit Facility"). The Operating Partnership
may increase the amount of the commitments under the Credit Facility up to an
aggregate of $3.795 billion and extend the term of the Revolving Credit Facility
for up to two additional periods of six months each, after satisfying certain
conditions.
Amounts outstanding under the Credit Facility will bear interest at floating
rates, at the Operating Partnership's option, equal to either (i) LIBOR plus the
applicable Eurodollar rate margin or (ii) the applicable base rate which is the
applicable margin plus the highest of (a) 0.00%, (b) the federal funds rate plus
0.50%, (c) U.S. Bank's prime rate or (d) the Eurodollar rate plus 1.00%. The
applicable Eurodollar rate margin for the Revolving Credit Facility will range
from 0.700% to 1.400% per annum and the applicable base rate margin for the
Revolving Credit Facility will range from 0.00% to 0.400% per annum, and the
applicable Eurodollar rate margin for the Term Loan Facilities will range from
0.750% to 1.600% per annum and the applicable base rate margin for the Term Loan
Facilities will range from 0.00% to 0.600% per annum, in each case depending on
the Company's credit ratings.
The Operating Partnership may voluntarily prepay loans under the Credit
Agreement in whole or in part at any time, subject to certain notice
requirements. Amounts borrowed under the Term Loan Facilities that are repaid or
prepaid may not be reborrowed.
The Credit Agreement is guaranteed by the Company and by certain current and
future subsidiaries of the Company that directly or indirectly own an equity
interest in the Operating Partnership and certain current and future
subsidiaries of the Operating Partnership that become a borrower or guarantor
of, or otherwise become obligated to make any payment in respect of unsecured
indebtedness (subject to certain exceptions). The Credit Agreement is not
secured by any assets of the Company or its subsidiaries.
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The Credit Agreement includes a series of financial and other covenants that the
Company and the Operating Partnership must comply with, including:
•maintaining a ratio of total indebtedness to total asset value of not more than
60%, except during certain limited periods of time following a material
acquisition, during which time such ratio shall not exceed 65%;
•maintaining a ratio of total secured debt to total asset value of not more than
40%;
•maintaining a ratio of adjusted EBITDA to fixed charges of at least 1.50 to
1.00; and
•maintaining a ratio of total unsecured debt to total unencumbered asset value
of not more than 60%, except during certain limited periods of time following a
material acquisition, during which time such ratio shall not exceed 65%.
The Credit Agreement contains usual and customary events of default including
defaults in the payment of principal, interest or fees, defaults in compliance
with the covenants set forth in the Credit Agreement and other loan
documentation, cross-defaults to certain other indebtedness, and bankruptcy and
other insolvency defaults. If an event of default occurs and is continuing under
the Credit Agreement, all outstanding principal amounts, together with all
accrued unpaid interest and other amounts owing in respect thereof, may be
declared immediately due and payable.
Wells Fargo Bank N.A. is a lender under the Operating Partnership's outstanding
secured line of credit. JPMorgan Chase Bank, N.A., PNC Bank, National
Association, BMO Harris Bank, N.A., TD Bank, N.A., Truist Bank, U.S. Bank,
National Association, Wells Fargo Bank N.A., Zions Bancorporation, N.A. and an
affiliate of BofA Securities, Inc. are lenders under certain of the Operating
Partnership's outstanding secured term loans. In addition, Wells Fargo
Securities, LLC, BofA Securities, Inc., BMO Capital Markets Corp., BNP Paribas,
JPMorgan Chase Bank, N.A., Regions Bank, TD Bank, N.A. and Truist Securities,
act as sales agents in connection with certain equity distribution agreements
pursuant to which the Company may sell shares of its common stock from time to
time.
The foregoing summary of the Credit Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Credit
Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on
Form 8-K and is 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 set forth under Item 1.01 above is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 Second Amended and Restated Credit Agreement, dated as of June 22, 2021, by and
among Extra Space Storage Inc., Extra Space Storage LP, U.S. Bank National
Association, as administrative agent, certain other financial institutions acting
as syndication agents, documentation agents and lead arrangers and book runners,
and certain lenders party thereto.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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