ALTISOURCE RESIDENTIAL CORPORATION (NYSE:RESI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement
On March30, 2017, Altisource Residential Corporation (the
Company) entered into an agreement to acquire up to 3,500 single
family rental properties from entities sponsored by Amherst
Holdings, LLC (Amherst). Additionally, on March30, 2017, the
Company completed the first closing under this agreement with the
acquisition of 757 single family rental properties for an
aggregate purchase price of $106.5million. The Company may
purchase up to approximately 2,750 additional stabilized rental
properties from the Amherst sponsored entities in additional
closings in 2017. In connection with this acquisition and the
contemplated future acquisitions, the Company entered into
several agreements, which are described in more detail in this
Item 1.01 and Item 2.03 below.
Purchase and Sale Agreement
On March30, 2017, Altisource Residential, L.P. (Buyer), a
wholly-owned subsidiary of the Company, entered into a Purchase
and Sale Agreement (the PSA) with Vaca Morada Partners, LP (VMP)
and MSR II, LP (MSR, and collectively with VMP, the Sellers),
entities sponsored by Amherst. to the PSA, Buyer acquired 608
single family rental properties from VMP (the Initial VMP
Properties) and an additional 149 single family rental properties
from MSR (the Initial MSR Properties, and collectively with the
Initial VMP Properties, the Initial Properties). to the PSA and
in connection with the Loan Agreement (as described in Item 2.03
below), Buyer assigned the right to purchase the Initial
Properties to HOME SFR Borrower II, LLC, a newly formed special
purpose entity and an indirect wholly-owned subsidiary of the
Company (Property Owner).
As consideration for the Initial Properties, Buyer paid to
Sellers $106.5million, which is subject to certain customary
purchase price adjustments in accordance with the PSA. The
purchase price was funded with the proceeds from the Loan
Agreement as well as cash on hand.
In connection with the PSA, and as a condition to the Loan
Agreement, Property Owner entered into a property management
services agreement to which the current property manager for the
Initial Properties and an affiliate of Amherst, Main Street
Renewal, LLC (Property Manager), will provide Property Owner with
leasing and lease management, operations, maintenance, repair,
property management and property disposition services regarding
the Initial Properties.
to the PSA, in addition to the Initial Properties, Sellers have
committed to sell and Buyer has agreed to purchase 1,493
additional single family rental properties (the Committed
Additional Properties). In addition to the Initial Properties and
the Committed Additional Properties, Sellers have agreed to use
good faith efforts, subject to market conditions, to offer for
sale to Buyer and Buyer has agreed to purchase up to 1,250
additional single family rental properties (the Good Faith
Additional Properties). The acquisition of the Committed
Additional Properties and the Good Faith Additional Properties,
if any, is to occur in up to two additional closings, the first
to be on or before June29, 2017 and the final closing to be on or
before December30, 2017. In order to be presented to Buyer for
purchase, the Committed Additional Properties and the Good Faith
Additional Properties must comply with certain criteria and
specifications identified by Buyer.
The foregoing description of the PSA does not purport to be
complete and is subject to and qualified in its entirety by
reference to the full text of the PSA, which is filed as Exhibit
2.1 hereto and is incorporated herein by reference.
Loan Agreement
The information set forth in Item 2.03 is incorporated by
reference into this Item 1.01.
Item2.01 Completion of Acquisition or Disposition of
Assets
The information set forth in Item 1.01 regarding the Initial
Properties acquired to the PSA is incorporated by reference into
this Item 2.01.
Item2.03 Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant
On March30, 2017, Property Owner entered into a loan agreement
(the Loan Agreement) with VMP and MSR, as lenders (Lenders), and
Amherst SFR Lender, LLC, as agent. to the Loan Agreement,
Property Owner borrowed $79,878,931 in connection with the
acquisition of the Initial Properties to the PSA (collectively
the Loan) from Lenders, representing 75% of the aggregate
purchase price of the Initial Properties. The Loan is a floating
rate loan, composed of eight floating rate components, interest
on each of which is computed monthly based on one-month LIBOR plus a fixed
component spread. The entire principal amount of $79,878,931 is
currently allocable to one component at a fixed-rate spread over
one-month LIBOR of 2.750% which is anticipated to be the weighted
average fixed rate spread for the duration of the Loan. The
initial maturity date of the Loan is October9, 2019 (the Initial
Maturity Date). Property Owner has the option to extend the Loan
beyond the Initial Maturity Date for three successive one-year
extensions, provided, among other things, that there is no event
of default under the Loan Agreement on each maturity date.
The Loan is
secured by first priority mortgages on the Initial Properties.
The Loan Agreement requires that Property Owner comply with
various affirmative and negative covenants that are customary for
loans of this type, including limitations on indebtedness that
Property Owner can incur, limitations on sales and dispositions
of the Initial Properties and various restrictions on the use of
cash generated by the operations of the Initial Properties while
the Loan is outstanding. The 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 foregoing
description of the 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 Loan Agreement, which is filed as Exhibit
10.1 hereto and is incorporated herein by reference.
Item8.01
Other Events.
On March31, 2017,
the Company issued a press release, a copy of which is attached
hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item9.01
Financial Statements and Exhibits.
(a) Financial
Statements of business acquired.
The financial
statements required by this Item, if required, will be filed by
amendment to this Current Report on Form 8-K no later than 71
calendar days after the date this Current Report on Form 8-K is
required to be filed.
(b) Pro forma
financial information.
The pro forma
financial information required by this Item, if required, will be
filed by amendment to this Current Report on Form 8-K no later
than 71 calendar days after the date this Current Report on Form
8-K is required to
be filed.
(d)
Exhibits.
|
ExhibitNo. |
Description |
|
| 2.1 |
Purchase and Sale Agreement, dated March30, 2017, among Vaca Morada Partners, LP, MSR II, LP and Altisource Residential, L.P. * |
|
| 10.1 |
Loan Agreement, dated March30, 2017, among Home SFR Borrower II, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender, LLC, as Agent |
|
| 99.1 |
Press Release of Altisource Residential Corporation dated March31, 2017 |
| * |
Certain schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any of the omitted schedules or exhibits upon request by the United States Securities and Exchange Commission, provided, however, that the Company may request confidential treatment to Rule 24b-2 of the Exchange Act, as amended, for any schedules or exhibits so furnished. |
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned
hereunto duly authorized.
| AltisourceResidentialCorporation | ||||||
| Date: April5, 2017 | By: |
/s/ Robin N. Lowe |
||||
| Robin N. Lowe | ||||||
| Chief Financial Officer |
EXHIBIT
INDEX
|
ExhibitNo. |
Description |
|
| 2.1 |
Purchase and Sale Agreement, dated March30, 2017, among Vaca Morada Partners, LP, MSR II, LP and Altisource Residential, L.P. * |
|
| 10.1 |
Loan Agreement, dated March30, 2017, among Home SFR Borrower II, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender LLC, as Agent |
|
| 99.1 |
Press Release of Altisource Residential Corporation dated March31, 2017 |
| * |
Certain schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any of the omitted schedules or exhibits upon request by the United States Securities and Exchange Commission, provided, however, that the Company may request confidential treatment |
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 -0.28 at 14.93 with 467,862 shares trading hands.