FARMLAND PARTNERS INC. (NYSE:FPI) Files An 8-K Completion of Acquisition or Disposition of AssetsItem 2.01. Completion of Acquisition of Disposition of Assets
On February 14, 2017, the Company completed the previously announced acquisition of approximately 8,452 acres of farmland located in Illinois (the “Property”) from unrelated third-party sellers (the “Sellers”) for total consideration of approximately $54.3 million in cash. The Property was previously owner-occupied and, as a result, does not have a prior leasing history.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On February 14, 2017, a wholly owned subsidiary (the “Borrower”) of Farmland Partners Operating Partnership, L.P. (the “Operating Partnership”), the operating partnership of the Company, entered into a loan agreement (the “Loan Agreement”) with MetLife Insurance Company USA (“MetLife”), which provides for a term loan of $27.2 million (“Term Loan 6”). The proceeds of Term Loan 6 will be used to repay existing debt, to acquire additional properties and for general corporate purposes. Term Loan 6 matures on February 14, 2027 and is secured by first lien mortgages on certain of the Company’s properties.
Interest on Term Loan 6 is payable in cash semi-annually and accrues at an initial rate of 3.21% per annum, which may be adjusted by MetLife on each of February 14, 2020, February 14, 2023 and February 14, 2026 to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 6.
In connection with Term Loan 6, on February 14, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Loan Agreement.