Starwood Property Trust,Inc. (NYSE:STWD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On March15, 2019, Starwood Property Trust,Inc. (the “Company”) and certain subsidiaries of the Company entered into amendments of the guarantees (the “Amendments”) related to certain repurchase facilities identified below (the “Facilities”). The Amendments modified the following financial covenants applicable to the Company under each of the Facilities to provide that: (i)the ratio of EBITDA to interest expense for any calendar quarter shall not be less than 1.4 to 1.0 and (ii)the ratio of total indebtedness to total assets shall not be greater than 0.80 to 1.0.
The Facilities impacted by the Amendments include:
(ii) the ratio of total indebtedness to total assets shall not be greater than 0.8 to 1.0;
(iii) cash liquidity of the Company shall not be less than $75 million and near cash liquidity of the Company shall not be less than $175 million;
(iv) tangible net worth of the Company shall not be less than the sum of (x)actual tangible net worth of the Company as of March15, 2019, plus (y)seventy-five percent (75%) of the net cash proceeds (net of underwriting discounts and commissions and other out-of pocket expenses incurred by the Company in connection with such issuance or sale) received by the Company from the issuance or sale of equity interests (other than equity interests constituting convertible debt securities) occurring after March15, 2019, plus (z)seventy-five percent (75%) of any increase in capital or shareholders’ equity (or like caption) on the balance sheet of the Company resulting from the settlement, conversion or repayment of any convertible debt securities of the Company occurring after March15, 2019; and
(v) ratio of EBITDA to fixed charges shall not be less than 1.5 to 1.0.
In connection with the modifications to the Advances Agreement contemplated by the Letter Agreement, the Company executed a guaranty of all obligations of PMI under the Advances Agreement. Previously, the Company had guaranteed only a portion of the obligations of PMI under the Advances Agreement.
The foregoing summary does not purport to be a complete description and is qualified in its entirety by reference to the terms and conditions of the Advances Agreement and the Letter Agreement, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form10-Q for the quarterly period ending March31, 2019.
About Starwood Property Trust,Inc. (NYSE:STWD)
Starwood Property Trust, Inc. is a real estate investment trust. The Company operates through three business segments: Real estate lending (the Lending Segment), which engages primarily in originating, acquiring, financing and managing commercial first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments; Real estate investing and servicing (the Investing and Servicing Segment), which includes servicing businesses in the United States and Europe that manage and work out problem assets; an investment business that selectively acquires and manages unrated, investment grade and non-investment grade rated CMBS, and a mortgage loan business, and Real estate property (the Property Segment), which engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties.