MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.Entry into a Material Definitive Agreement.
On February 10, 2017, MedEquities Realty Operating Partnership,
LP, the operating partnership (the Operating Partnership) of
MedEquities Realty Trust, Inc. (the Company), entered into the
Second Amended and Restated Credit Agreement (the Amended Credit
Agreement) with KeyBank National Association, as administrative
agent and a lender, KeyBanc Capital Markets, Inc., JPMorgan Chase
Bank, N.A. and Citigroup Global Markets, Inc., as co-lead
arrangers and book runners, and the other lenders and agents
party thereto. The Amended Credit Agreement provides for a $300
million secured revolving credit facility (the Revolving Credit
Facility) and a $125 million secured term loan facility (the Term
Loan Facility and, together with the Revolving Credit Facility,
the Credit Facility). The Credit Facility replaces the Operating
Partnerships prior $300 million secured credit facility, which
was scheduled to mature in November 2017.At closing, the
Operating Partnership borrowed $31.5 million under the Revolving
Credit Facility and $125 million under the Term Loan Facility to
repay all amounts outstanding under the prior facility.
The Amended Credit Agreement includes an accordion feature that
allows the total commitments under the Credit Facility to be
increased to $700 million, including under an additional term
loan, subject to certain conditions, including obtaining
commitments from any one or more lenders. The amount available to
borrow under the Credit Facility is limited according to a
borrowing base valuation of assets owned by subsidiaries of the
Operating Partnership. At closing, the Operating Partnership had
approximately $101.1 million of available borrowing capacity
under the Revolving Credit Facility, based on the current
borrowing base assets. The Operating Partnership has the option
to remove assets from the pool of borrowing base assets and to
add different assets, subject to its continued compliance with
the financial covenants and other terms of the Amended Credit
Agreement. The Credit Facility is secured by a pledge of the
Operating Partnerships equity interests in its subsidiaries that
own borrowing base assets, which is substantially all of the
assets of the Company. The Amended Credit Agreement includes the
ability to convert the Credit Facility to an unsecured facility,
subject to certain conditions, including having a minimum gross
asset value (as defined in the Amended Credit Agreement) of $1.0
billion.
The Revolving Credit Facility has a scheduled maturity date of
February 10, 2021, with a one-year extension option, subject to
certain conditions, including payment of a 0.15% extension fee.
The Term Loan Facility has a scheduled maturity date of February
10, 2022.
Amounts outstanding under the Credit Facility bear interest at
either, at the Operating Partnerships election, LIBOR plus a
margin between 1.75% and 3.00% or a base rate plus a margin
between 0.75% and 2.00%, in each case depending on the Companys
leverage. In addition, the Operating Partnership is required to
pay a fee equal to 0.25% of the amount of the unused portion of
the Revolving Credit Facility if amounts borrowed are equal to or
greater than 50% of the total commitments under the Revolving
Credit Facility or 0.35% if amounts borrowed are less than 50% of
such commitments.
The Amended Credit Agreement contains customary representations
and warranties and financial and other affirmative and negative
covenants. The Operating Partnerships ability to borrow under the
Credit Facility is subject to ongoing compliance by the Company
and the Operating Partnership with various customary restrictive
covenants, including with respect to liens, indebtedness,
investments, distributions, mergers and asset sales. In addition,
the Amended Credit Agreement requires the Company and the
Operating Partnership to satisfy certain financial covenants,
including the following:
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total consolidated indebtedness not exceeding 60%of gross |
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a minimum fixed charge coverage ratio (defined as the |
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a minimum consolidated tangible net worth (defined as |
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a minimum aggregate occupancy rate of 85% for borrowing |
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a minimum weighted-average remaining initial lease term |
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minimum borrowing base assets of at least ten borrowing |
The Operating Partnership may, at any time, voluntarily prepay
any loan under the Credit Facility in whole or in part without
premium or penalty
The Amended Credit Agreement includes customary events of
default, in certain cases subject to customary periods to cure.
The occurrence of an event of default, following the applicable
cure period, would permit the lenders to, among other things,
declare the unpaid principal, accrued and unpaid interest and all
other amounts payable under the Credit Facility to be immediately
due and payable.
The Operating Partnerships obligations under the Amended Credit
Agreement are guaranteed by the Company and certain of its
subsidiaries, to the Second Amended and Restated Unconditional
Guaranty of Payment and Performance, dated as of February 10,
2017 (the Guaranty).
The foregoing summary of the Amended Credit Agreement and the
Guaranty does not purport to be complete and is qualified in its
entirety by reference to the Amended Credit Agreement and the
Guaranty, copies of which are attached as Exhibit 10.1 and 10.2
hereto, respectively, and are 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 set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated into this Item 2.03 by reference.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number |
Description |
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10.1 |
Second Amended and Restated Credit Agreement, dated as of |
|
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10.2 |
Second Amended and Restated Unconditional Guaranty of |
About MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT)
MedEquities Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company invests primarily in real estate across the acute and post-acute spectrum of care. It focuses on investing in various types of healthcare properties, including acute care hospitals; skilled nursing facilities; short-stay surgical and specialty hospitals, which focus on orthopedic, heart and other dedicated surgeries and specialty procedures; dedicated specialty hospitals, such as inpatient rehabilitation facilities, long-term acute care hospitals and facilities providing psychiatric care; physician clinics; diagnostic facilities; outpatient surgery centers, and facilities that support these services, such as medical office buildings. As of September 30, 2016, the Company’s portfolio included 24 healthcare facilities and one healthcare-related debt investment. MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) Recent Trading Information
MEDEQUITIES REALTY TRUST, INC. (NYSE:MRT) closed its last trading session down -0.03 at 11.27 with 170,787 shares trading hands.