Stratus Properties Inc. (NASDAQ:STRS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On June 29, 2018, Stratus Properties Inc. (“Stratus”) entered into a Loan Agreement (the “Loan Agreement”) by and between Stratus and certain of its wholly-owned subsidiaries, Stratus Properties Operating Co., L.P., Circle C Land, L.P., Austin 290 Properties, Inc., The Villas at Amarra Drive, L.L.C., 210 Lavaca Holdings, L.L.C., Magnolia East 149, L.L.C., and Stratus Lakeway Center, L.L.C. (collectively with Stratus, the “Borrowers”), as borrowers, and Comerica Bank (“Comerica”), as lender. The Loan Agreement modifies, increases and extends, Stratus’ $52.5 million credit facility with Comerica (the “Prior Loan Agreement”), which was comprised of a $45.0 million revolving credit facility and a $7.5 million letters of credit tranche that was scheduled to mature on November 30, 2018.
The Loan Agreement provides for: (1) an increase in the revolving credit facility from $45.0 million to $60.0 million, (2) a $7.5 million sublimit for letters of credit issuance, (3) an additional estimated $20.3 million collateral added to the borrowing base in consideration of the increase in the revolving credit facility, and (4) extends the maturity date from November 30, 2018 to June 29, 2020. Under the terms of the $60.0 million promissory note evidencing the Loan Agreement, the interest rate applicable to amounts borrowed is equal to an annual rate of LIBOR plus 4.0% or the prime referenced rate plus 1.0%.
Proceeds from the revolving credit facility shall be used to fund Stratus’ working capital needs, including land acquisitions; however, without prior approval from Comerica, individual land acquisitions shall not exceed $3.0 million and aggregate land transactions shall not exceed $10.0 million.
The Loan Agreement contains customary financial covenants, including a requirement that Stratus maintain at all times (1) a net asset value of $125.0 million and (2) aggregate promissory note debt-to-gross asset value at all times of less than 50%. Repurchases of shares of Stratus’ common stock in excess of $1,000,000 in the aggregate during the term of the loan would require Comerica’s prior written consent.
Repayments under the Loan Agreement can be accelerated by Comerica upon the occurrence of certain customary events of default. Stratus' obligations under the Loan Agreement are secured by substantially all of Stratus' assets, except for properties that are encumbered by separate loan financing.
As of June 29, 2018, the principal balance outstanding under the revolving credit facility was $43.9 million, and letters of credit totaling $4.1 million were committed against the revolving credit facility.
The foregoing summary of the Loan Agreement and the Promissory Note 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 and the Promissory Note, each of which are filed as exhibits hereto and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosures set forth in Item 1.01 above are incorporated by reference into this Item 2.03.
Item 8.01. Other Events.
Stratus issued a press release dated July 5, 2018, announcing the increase and extension of its revolving credit facility. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated in this Item 8.01 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number |
Exhibit Title |
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Loan Agreement by and between Stratus Properties Inc., certain of its subsidiaries and Comerica Bank, dated as of June 29, 2018. |
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Revolving Promissory Note by and between Stratus Properties Inc., certain of its subsidiaries and Comerica Bank, dated as of June 29, 2018. |
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Press release dated July 5, 2018, titled “Stratus Properties Inc. Announces Increase and Extension of Its Revolving Credit Facility.” |
STRATUS PROPERTIES INC ExhibitEX-10.1 2 exhibit10106-29×2018.htm EXHIBIT 10.1 Exhibit LOAN AGREEMENTBY AND BETWEENCOMERICA BANKANDSTRATUS PROPERTIES INC. STRATUS PROPERTIES OPERATING CO.,…To view the full exhibit click here
About Stratus Properties Inc. (NASDAQ:STRS)
Stratus Properties Inc. (Stratus) is a diversified real estate company. The Company is engaged primarily in the acquisition, entitlement, development, management, operation and sale of commercial, hotel, entertainment, and multi- and single-family residential real estate properties, primarily located in the Austin, Texas area, but including projects in certain other select markets in Texas. It operates in four segments: Hotel, Entertainment, Real Estate Operations and Commercial Leasing. Its properties include Barton Creek that includes Calera, Amarra Drive, Mirador Estate and Barton Creek Village; Circle C Community; Lantana; The Oaks at Lakeway and Magnolia. The Hotel segment includes the W Austin Hotel, which has over 251 luxury rooms and suites, a full service spa, gym, rooftop pool and over 9,750 square feet of meeting space. The Commercial Leasing segment includes the office and retail space at the W Austin Hotel & Residences project and a retail building at The Oaks at Lakeway.
