SUTHERLAND ASSET MANAGEMENT CORPORATION (NYSE:SLD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
6.50% Senior Notes due 2021
On April27, 2018, Sutherland Asset Management Corporation (the “Company”) completed the public offer and sale of $50,000,000 aggregate principal amount of its 6.50% Senior Notes due 2021 (the “Notes”). The net proceeds from the sale of the Notes are approximately $48,042,000, after deducting underwriters’ discounts and commissions and estimated offering expenses. The Company will contribute the net proceeds to Sutherland Partners, L.P. (the “Operating Partnership”), its operating partnership subsidiary, in exchange for the issuance by the Operating Partnership of a senior unsecured note with terms that are substantially equivalent to the terms of the Notes. The Operating Partnership intends to use the net proceeds to originate or acquire the Company’s target assets and for general corporate purposes.
Underwriting Agreement
On April25, 2018, the Company entered into an underwriting agreement (the “Underwriting Agreement”), by and among the Company, the Operating Partnership and Waterfall Asset Management, LLC and Sandler O’Neill& Partners, L.P., on behalf of each of the underwriters listed therein (collectively, the “Underwriters”). The Underwriting Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions whereby the Company and the Operating Partnership, on the one hand, and the Underwriters, on the other hand, have agreed to indemnify each other against certain liabilities.
Indenture
The Company issued the Notes under a base indenture, dated August9, 2017, as supplemented by the second supplemental indenture, dated as of April27, 2018 (together, the “Indenture”), between the Company and U.S. Bank National Association, as trustee.
The Notes bear interest at a rate of 6.50% per annum, payable quarterly in arrears on January30, April30, July30, and October30 of each year, beginning on July30, 2018. The Notes will mature on April30, 2021, unless earlier redeemed or repurchased.
Prior to April30, 2019, the Notes will not be redeemable by the Company. The Company may redeem for cash all or any portion of the Notes, at its option, on or after April 30, 2019 and before April 30, 2020 at a redemption price equal to 101% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. On or after April 30, 2020, the Company may redeem for cash all or any portion of the Notes, at its option, at a redemption price equal to 50% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company undergoes a change of control repurchase event, holders may require it to purchase the Notes, in whole or in part, for cash at a repurchase price equal to 101% of the aggregate principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase, as described in greater detail in the Indenture.
The Notes are the Company’s senior direct unsecured obligations and will not be guaranteed by any of its subsidiaries, except to the extent described in the Indenture upon the occurrence of certain events. The Notes rank equal in right of payment to any of the Company’s existing and future unsecured and unsubordinated indebtedness; effectively junior in right of payment to any of its existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness, other liabilities (including trade payables) and (to the extent not held by the Company) preferred stock, if any, of its subsidiaries.
The occurrence of an Event of Default (as defined in the Indenture) may, subject to certain conditions set forth in the Indenture, lead to the outstanding principal, plus accrued and unpaid interest, if any, of the Notes being immediately due and payable.
The Company has applied to list the notes on the New York Stock Exchange and expects trading of the Notes to commence thereon within 30days after the original issue date.
The foregoing description of the Underwriting Agreement, the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, the Indenture
