INVITATION HOMES INC. Item 1.01 Entry into a Material Definitive Agreement.
On
• a $150.0 million initial term loan (the "Initial Term Loan"), which will
mature on June 22, 2029 ; and
• up to three delayed draw term loans (the "Delayed Draw Term Loans")
totaling $575.0 million , which will mature on June 22, 2029 , which may be
drawn during the six month period following the date of effectiveness of
the Term Loan Agreement.
The Term Loan Agreement also includes an accordion feature providing the option
to increase the size of the Term Loans or enter into additional incremental term
loans, such that the aggregate amount of the Term Loans, together with such
additional incremental term loans, does not exceed at any time
Proceeds from the Initial Term Loan and excess cash on hand were used as part of
a series of transactions to fully repay the
Interest Rate and Fees
Borrowings under the Term Loan Agreement bear interest, at the Borrower's option, at a rate equal to a margin over either (a) an Adjusted Term SOFR rate determined by reference to the Term SOFR rate published by the Term SOFR Administrator for the interest period relevant to such borrowing or (b) a base rate determined by reference to the highest of (1) the administrative agent's prime lending rate, (2) the federal funds effective rate plus 0.50%, and (3) the Term SOFR reference rate that would be payable on such day for an Adjusted Term SOFR rate loan with a one-month interest period plus 1.00%. The margin for the Initial Term Loan and the Delayed Draw Term Loans ranges from 0.15% to 1.20%, in the case of base rate loans, and 1.15% to 2.20%, in the case of Term SOFR loans. The margin as of the date of effectiveness of the Term Loan Agreement is 0.25%, in the case of base rate loans, and 1.25%, in the case of Term SOFR rate loans. The Term Loan Agreement also includes a sustainability component whereby the Term Loans' pricing can improve upon the Company's achievement of certain sustainability ratings, determined via an independent third-party evaluation.
The Borrower is also required to pay an unused fee to the lenders equal to the daily unused balance of the Delayed Draw Term Loan commitments multiplied by 0.20% per annum.
Prepayments
The Borrower is permitted to voluntarily repay amounts outstanding under the Term Loans (a) on or prior to the first anniversary of the closing subject to a 2.0% prepayment fee, (b) on or prior to the second anniversary of the closing subject to a 1.0% prepayment fee and (c) at any time thereafter without premium or penalty
Amortization
The Term Loans have no required amortization payments prior to the final maturity date.
Guarantees
The obligations under the Term Loans are guaranteed on a joint and several basis by the Company and each other subsidiary of the Company that owns, directly or indirectly, equity interests in the Borrower. These guarantees will be automatically released upon the occurrence of certain events. In addition, certain domestic wholly owned subsidiaries of the Borrower that own, directly or indirectly, unencumbered assets may be required to provide a guarantee of the Term Loans under certain circumstances, including if such subsidiary is a borrower or guarantor of other recourse indebtedness.
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Certain Covenants and Events of Default
The Term Loans contain certain customary affirmative and negative covenants and events of default, consistent with the terms of the Borrower's existing amended and restated revolving credit facility and term loan agreement. Subject to certain exceptions, such covenants restrict the ability of the Borrower and its subsidiaries to, among other things:
• engage in certain mergers, consolidations or liquidations;
• sell, lease or transfer all or substantially all of their respective assets;
• engage in certain transactions with affiliates;
• make changes to the Borrower's fiscal year or change the method of
determining fiscal quarters;
• make changes in the nature of the business of the Borrower and its
subsidiaries; and
• incur additional indebtedness on a pari passu basis with the Term Loans.
The Term Loan Agreement also requires the Borrower, on a consolidated basis with its subsidiaries, to maintain a (i) maximum total leverage ratio, (ii) maximum secured leverage ratio, (iii) maximum unencumbered leverage ratio, (iv) minimum fixed charge coverage ratio, (v) minimum unsecured interest coverage ratio and (vi) maximum secured recourse leverage ratio.
If an event of default occurs, the lenders will be entitled to take various actions, including the acceleration of amounts due under the Term Loan Agreement.
The foregoing summary of the Term Loan Agreement is qualified in its entirety by reference to the Term Loan Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
From time to time, the Company has had customary commercial and/or investment
banking relationships with affiliates of
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description 10.1 Term Loan Agreement, dated as ofJune 22, 2022 , by and amongInvitation Homes Operating Partnership LP , as borrower, the lenders party thereto,Capital One, National Association , as administrative agent and the other parties party thereto. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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