Global Net Lease, Inc. (NYSE:GNL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On August 13, 2018, certain wholly owned subsidiaries (the “Borrowers”) of Global Net Lease, Inc. (the “Company”), entered into a syndicated investment facility loan agreement (the “Loan Agreement”) with Lloyds Bank plc, as agent (the “Agent”), and also delivered an irrevocable utilization request to which, on August 16, 2018, the Borrowers borrowed £230.0 million (the “Loan”) secured by all 43 of the Company’s properties in the United Kingdom, which are directly owned by the Borrowers (each, a “Mortgaged Property” and collectively, the “Mortgaged Properties”), as well as the Company’s indirectly owned equity interests in the Borrowers. The Loan is also guaranteed by the Borrowers to the Loan Agreement.
The maturity date of the Loan is August 13, 2023 and it bears interest at a rate of 1.975% + 3-month GBP LIBOR, with the interest rate with respect to 80% of the principal amount to be fixed by a swap agreement, which is expected to be executed later today. The Loan Agreement requires quarterly interest-only payments for the first two years of the Loan followed by scheduled principal amortization of £37.9 million in the final three years of the Loan, with the remaining principal due at maturity.
At the closing of the Loan Agreement, £209 million of the net proceeds after costs and fees related to the Loan were used to repay all outstanding indebtedness encumbering 38 of the Mortgaged Properties, including indebtedness under which Agent was as lender. The other five Mortgaged Properties were unencumbered prior to the Loan.
The Borrowers may prepay the Loan in whole or in part at any time. Mandatory prepayments (or substitutions or additions to the pool of properties securing the Loan) are also required in connection with dispositions of Mortgaged Properties, curing certain defaults and other customary circumstances. In connection with any prepayment, the lenders under the Loan are entitled to receive a prepayment fee equal to (i) 3.00% of the amount prepaid for prepayments on or prior to August 13, 2019, (i) 2.00% of the amount prepaid for prepayments between August 14, 2019 and August 13, 2020, and (iii) 1.00% of the amount prepaid for prepayments between August 14, 2020 and August 13, 2021. No prepayment fee is payable after August 13, 2021.
The Loan Agreement contains customary representations and covenants for a loan agreement of this type, including financial covenants related to maintenance of interest coverage ratios and loan-to-value ratios with respect to the Mortgaged Properties, taken as a whole. Under certain circumstances and subject to conditions, the Company may be required to provide an unsecured corporate guaranty of the Borrowers’ obligations in an amount no greater than £20.0 million to the extent required to maintain compliance with these financial covenants. This guaranty would be to a form of guaranty agreement attached as an exhibit to the Loan Agreement which requires, among other things, that the Company maintain liquidity necessary to meet the amount obligations guaranteed and maintain compliance with the financial covenants contained in its corporate-level credit facility.
The foregoing summary of the material terms 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 attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
|Item 2.03||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information contained under the subheading United Kingdom Refinancing in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
|Item 9.01.||Financial Statements and Exhibits.|
Global Net Lease, Inc. ExhibitEX-10.1 2 tv501129_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 EXECUTION VERSION 13 August 2018 THE ENTITIES LISTED IN Part A OF Schedule 1 as Borrowers and THE ENTITIES LISTED IN PART B OF Schedule 1 as Original Guarantors arranged by LLOYDS BANK PLC with LLOYDS BANK PLC acting as Agent and LLOYDS BANK PLC acting as Security Agent Up to £230,…To view the full exhibit click
About Global Net Lease, Inc. (NYSE:GNL)
Global Net Lease, Inc. is a real estate investment trust that focuses on acquiring and managing a portfolio of strategically located commercial real estate properties. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. The Company focuses its investments on commercial and retail properties, including special use single tenant properties. The Company owns approximately 330 net-leased commercial properties consisting of over 18.7 million rentable square feet. The Company has approximately 270 properties located in the United States and Puerto Rico, over 40 properties located in the United Kingdom and approximately 20 properties located across continental Europe. Its portfolio of real estate properties includes McDonald’s, Wickes Building Supplies I, Thames Water, Northern Rock, Con-way Freight, Western Digital, GE Aviation, DFS Trading, Talk Talk, GSA IV, Nissan, Select Energy Services I and Lhoist.