Item 1.01. Entry into a Material Definitive Agreement.
Credit Agreement
On
The Credit Agreement includes the option to increase the revolving loan
commitments or add term loans under the Credit Agreement to up to
The Credit Agreement is guaranteed by certain subsidiaries of the Company that
guarantee other unsecured indebtedness of the Company. Subsidiaries of Company
are required to guarantee the Company's obligations under the Credit Agreement
if any such subsidiary incurs unsecured indebtedness or guarantees unsecured
indebtedness of the Company or another subsidiary of the Company (excluding,
among other things, guarantees of certain indebtedness in an aggregate principal
amount not in excess of
Borrowings under the Revolving Credit Facility will bear interest, at Company's
option, at a rate of either Term SOFR (plus a credit spread adjustment) plus a
margin ranging from 0.725% to 1.40%, Daily SOFR (plus a credit spread
adjustment) plus a margin ranging from 0.725% to 1.40% or the base rate plus a
margin ranging from 0.00% to 0.40%, in each case, with the actual margin
determined according to the Company's credit rating. The base rate is the
highest of the Agent's prime rate, the federal funds rate plus 0.50% and the
adjusted Term SOFR for a one-month tenor plus 1.0%. In addition, the Credit
Agreement requires the payment of a facility fee equal to 0.125% to 0.30%
(depending on the Company's credit rating) on the
The Credit Agreement contains representations, financial and other affirmative and negative covenants that are generally customary for credit facilities of this type. The Credit Agreement requires that the Company comply with various covenants, including covenants restricting indebtedness, mergers, affiliate transactions, entering into agreements with restrictions on granting liens or intercompany transfers, asset sales, indebtedness and the payment of dividends following an event of default. In addition, the Credit Agreement requires that the Company satisfy certain financial maintenance covenants, including:
• ratio of consolidated total indebtedness to consolidated total asset value of not more than 0.60 to 1.00 (subject to a higher level of 0.65 to 1.00 for four quarters following material acquisitions); • a minimum consolidated tangible net worth of$1.57 billion ; • ratio of consolidated EBITDA to consolidated fixed charges of not less than 1.50 to 1.00; • ratio of secured indebtedness to consolidated total asset value of not more than 0.30 to 1.00; • ratio of unsecured indebtedness to unencumbered asset value of not more than 0.60 to 1.00 (subject to a higher level of 0.65 to 1.00 for four quarters following material acquisitions); and • ratio of consolidated net operating income from all properties included in unencumbered asset value to consolidated unsecured interest expense of not less than 2.00 to 1.00.
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The Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the Credit Agreement to be immediately due and payable.
Amendment to Existing Term Loan Agreement
On the Effective Date, the Company entered into an Amendment No. 1 to Term Loan
Agreement (the "Amendment") with
The Amendment, among other things, modifies the existing representations, covenants, financial covenants and events of default in the Existing Term Loan Agreement to align with the same provisions in the Credit Agreement. In addition, the Amendment amends the interest rate provisions in the Existing Term Loan Agreement to accrue interest based on SOFR (plus a credit spread adjustment) that were previously based on LIBOR, with no change to the existing applicable interest rate margins. The Company may also still elect for the 2018 Term Loan to accrue interest at a base rate plus the applicable margin.
Except as amended by the Amendment, the terms of the Existing Term Loan Agreement remain in full force and effect.
Certain of the lenders under Revolving Credit Facility and the 2018 Term Loan or their affiliates have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for the Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.
The foregoing descriptions of the Credit Agreement and the Amendment do not
purport to be a complete statement of the terms and conditions of the Credit
Agreement and the Amendment and are qualified in their entirety by reference to
the text of such Credit Agreement and the Amendment, copies of which will be
filed as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter
ending
Item 1.02 Termination of a Material Definitive Agreement.
On the Effective Date, the existing credit agreement by and among the Company,
as borrower,
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 of this report is hereby incorporated by reference into this Item 2.03.
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