ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
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ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Entry into a Material Definitive Agreement
Entry into a Credit and Security Agreement
On April 6, 2017, RESI TL1 Borrower, LLC (the Borrower), an
indirect wholly owned subsidiary of Altisource Residential
Corporation (the Company), entered into a credit and security
agreement (the Term Loan Agreement) with American Money
Management Corporation (the Agent), as Agent, on behalf of Great
American Life Insurance Company and Great American Insurance
Company as initial lenders, and each other lender added from time
to time as a party to the Term Loan Agreement (collectively, the
Lenders and each, a Lender).
to the Term Loan Agreement, the Borrower borrowed $100.0 million
to finance the ownership and operation of single-family rental
properties (the Term Loan). The Term Loan Agreement has a
maturity date of April 6, 2022 and a fixed interest rate of
5.00%.
Approximately $73.6 million of the Term Loan Agreement proceeds
were used to pay down other existing borrowings of the Company.
The Term Loan Agreement requires that the Borrower comply with
various affirmative and negative covenants that are customary for
loans of this type including, without limitation, reporting
requirements to the Agent; maintenance of minimum levels of
liquidity, indebtedness and tangible net worth; limitations on
sales and dispositions of the properties collateralizing the Term
Loan Agreement and various restrictions on the use of cash
generated by the operations of the properties while the Term Loan
is outstanding. The Term Loan Agreement also includes customary
events of default, the occurrence of which would allow the
Lenders to accelerate payment of all amounts outstanding
thereunder. The Term Loan is non-recourse to the Company and is
secured by a lien on the membership interests of the Borrower and
the properties and other assets of the Borrower. The assets of
the Borrower are the primary source of repayment and interest on
the Term Loan, thereby making the cash proceeds received by the
Borrower from rent payments and any sales of the underlying
properties the primary sources of the payment of interest and
principal by the Borrower to the Lenders. The Company has limited
indemnification obligations for wrongful acts taken by the
Borrower and RESI TL1 Pledgor, LLC, the sole member of the
Borrower, in connection with the secured collateral.
The foregoing description of the Term Loan Agreement does not
purport to be complete and is subject to and qualified in its
entirety by reference to the full text of the Term Loan
Agreement, which is filed as Exhibit 10.1 hereto and is
incorporated herein by reference.
Amendment No.1 to Amended and Restated Loan and Security
Agreement with Nomura
On April 6, 2017, the Company, acting through its subsidiaries,
amended and extended its existing $250.0 million loan and
security agreement (the April 2016 Facility and, as newly
amended, the Amended Nomura Facility) with Nomura Corporate
Funding Americas, LLC (Nomura) through the entry into Amendment
No.1 to the Amended and Restated Loan and Security Agreement (the
Amendment Agreement). Under the Amendment Agreement, the Company
and Nomura:
extended the termination date of the facility by one year to
April 5, 2018;
retained a maximum aggregate borrowing amount of $250.0
million and increased the uncommitted maximum borrowing
amount to $100.0 million, which is available to the Company
subject to the Company meeting certain eligibility
requirements; and
removed the exit fee requirement upon early repayment.
Prior to the entry into the Amendment Agreement, an aggregate of
approximately $144.5 million was outstanding under the April 2016
Facility. The Company used a portion of the proceeds from the
Term Loan Agreement to pay down a portion of the Amended Nomura
Facility and, upon such payment, an aggregate of approximately
$109.6 million remained outstanding under the Amended Nomura
Facility.
The obligations of the Companys subsidiaries under the Amendment
Agreement continue to be fully guaranteed by the Company to the
original Guaranty (the Guaranty) made by the Company in favor of
Nomura with respect to the original loan and security agreement
between the Company and Nomura dated April 10, 2015 (the Original
Facility).
Other than as described above, the terms of the Amended Nomura
Facility remain substantially the same as the April 2016
Facility.
The disclosures herein regarding the Amendment Agreement do not
purport to be complete and are qualified in their entirety to the
full text of the Amendment Agreement, which is filed as Exhibit
10.2 hereto and is incorporated herein by reference. The
disclosures herein regarding the Original Facility, the Guaranty
and the April 2016 Facility do not purport to be complete and are
qualified in their entirety by the full text of the Original
Facility and Guaranty, which were filed as Exhibits 10.1 and 10.2
to the Companys Form 10-Q for the quarter ended March 31, 2015
filed with the Securities and Exchange Commission (the SEC) on
May 7, 2015, and the full text of the loan and security agreement
for the April 2016 Facility, which was filed as Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed with the SEC on
April 13, 2016.
Item 2.03
Creation of a Direct Financial Obligation or an
Obligation under and Off-Balance Sheet Arrangement of a
Registrant
See Item 1.01 above, which is incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits
10.1
Credit and Security Agreement, dated April 6, 2017,
between RESI TL1 Borrower, LLC; American Money Management
Corporation, as Agent; and each Lender named a party
thereto.
10.2
Amendment No. 1 to Amended and Restated Loan and Security
Agreement, dated as of April 6, 2017, among Nomura
Corporate Funding Americas, LLC, and ARLP REO I, LLC, on
behalf of itself and with respect to QRS Series of ARLP
REO I, LLC and TRS Series of ARLP REO I, LLC, ARLP REO
II, LLC, on behalf of itself and with respect to QRS
Series of ARLP REO II, LLC and TRS Series of ARLP REO II,
LLC, ARLP REO III, LLC, on behalf of itself and with
respect to QRS Series of ARLP REO III, LLC and TRS Series
of ARLP REO III, LLC, ARLP REO IV, LLC, on behalf of
itself and with respect to QRS Series of ARLP REO IV, LLC
and TRS Series of ARLP REO IV, LLC, ARLP REO V, LLC, on
behalf of itself and with respect to QRS Series of ARLP
REO V, LLC and TRS Series of ARLP REO V, LLC, ARLP REO
VI, LLC, on behalf of itself and with respect to QRS
Series of ARLP REO VI, LLC and TRS Series of ARLP REO VI,
LLC, ARLP REO VII, LLC, on behalf of itself and with
respect to QRS Series of ARLP REO VII, LLC and TRS Series
of ARLP REO VII, LLC and ARLP REO 400, LLC, on behalf of
itself and with respect to QRS Series of ARLP REO 400,
LLC and TRS Series of ARLP REO 400, LLC and ARLP REO 500,
LLC, on behalf of itself and with respect to QRS Series
of ARLP REO 500, LLC and TRS Series of ARLP REO 500, LLC
and each other Delaware limited liability company that is
organized in series that may be subsequently added as a
party thereto.


About ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI)

Altisource Residential Corporation is a real estate investment trust (REIT). The Company is focused on acquiring, owning and managing single-family rental properties throughout the United States. The Company operates through the segment focused on the resolution of sub-performing and non-performing mortgages, and acquisition and ownership of rental residential properties. It acquires its single-family rental properties primarily through the acquisition of sub-performing and non-performing loan portfolios. The Company conducts its activities through its subsidiary, Altisource Residential, L.P., and its subsidiaries. The Company has approximately 6,520 real estate owned (REO) properties, consisting of over 4,930 REO properties held for use and over 1,580 held for sale. Of approximately 4,930 REO properties held for use, over 2,120 properties are leased, over 260 are listed and ready for rent, and approximately 350 are in varying stages of renovation and unit turn status.

ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI) Recent Trading Information

ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI) closed its last trading session down -0.02 at 15.19 with 317,638 shares trading hands.