Terreno Realty Corporation (NYSE:TRNO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement |
| Item2.03 |
Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Agreement of a Registrant |
On June7, 2017, Terreno Realty LLC (the Company), a wholly-owned
subsidiary of Terreno Realty Corporation (the Parent Guarantor),
and the Parent Guarantor entered into a Note Purchase Agreement
(the Note Purchase Agreement) with the various purchasers named
therein (the Purchasers) in connection with a private placement
of senior guaranteed notes. Under the Note Purchase Agreement,
the Company will sell to the Purchasers $100,000,000 aggregate
principal amount of its 3.75% Senior Guaranteed Notes, due
July14, 2024 (the Notes). The Notes bear interest at a rate of
3.75% per annum, payable semiannually, on the 14th day of January
and July in each year until maturity, commencing on January14,
2018. The entire principal amount of the Notes is due and payable
on July14, 2024. The sale and purchase of the Notes will occur at
a closing on July14, 2017, subject to the satisfaction of
customary closing conditions.
The Company may prepay at any time all, or from time to time any
part of, any Notes, in an amount not less than 10% of the
aggregate principal amount of Notes then outstanding in the case
of a partial prepayment, at 50% of the principal amount so
prepaid plus a make-whole premium as set forth in the Note
Purchase Agreement. The obligations of the Company under the
Notes are unconditionally guaranteed by the Parent Guarantor and
by each of the Companys subsidiaries that guarantees or otherwise
becomes liable at any time, whether as a borrower or an
additional or co-borrower or otherwise, for or in respect of any
indebtedness under the Companys Primary Credit Facility (as
defined in the Note Purchase Agreement).
In the event of a Change of Control (as defined in the Note
Purchase Agreement), each holder of the Notes may require the
Company to prepay the entire unpaid principal amount of the Notes
held by such holder at a price equal to 50% of the principal
amount of such Notes together with accrued and unpaid interest
thereon, but without any Make-Whole Amount (as defined in the
Note Purchase Agreement) or other premium.
The Note Purchase Agreement contains restrictive covenants that,
among other things, restrict the ability of the Company to:
(i)enter into transactions with affiliates; (ii)merge,
consolidate, transfer or lease all or substantially all of its
assets; (iii)create liens; and (iv)make certain investments, and
the Company is required to comply with certain additional
requirements with respect to qualifying unencumbered properties
as defined and set forth therein. Subject to certain conditions,
the covenant with respect to qualifying unencumbered properties
will be removed, amended or otherwise modified to be more or less
restrictive if the analogous covenant in the Primary Credit
Facility is so removed, amended or otherwise modified.
The Note Purchase Agreement also includes the following financial
covenants, which require that the Company and the Parent
Guarantor will not permit: (i)the unencumbered property pool
leverage ratio to be greater than 60% at any time;
(ii)consolidated total indebtedness, less unrestricted cash and
cash equivalents, to be more than 60% of consolidated gross asset
value at any time; (iii)adjusted EBITDA to be less than 1.50x
consolidated fixed charges at any time; (iv)secured indebtedness,
in the aggregate at any time, to be more than 40% of consolidated
gross asset value; (v)the unsecured debt service coverage to be
less than 1.75 to 1.00 at any time; (vi)recourse indebtedness
that constitutes secured indebtedness, in the aggregate at any
time, to be more than 10% of consolidated gross asset value; or
(vii)consolidated tangible net worth of the Company on a
consolidated basis with the Parent Guarantor and its subsidiaries
to be less than $607,356,337 plus 75% of the equity contributions
or sales of capital stock received by the Parent Guarantor, the
Company or any of its subsidiaries after August1, 2016; provided,
however, that subject to certain conditions the financial
covenants described in (v), (vi) and (vii)above will be removed,
amended or otherwise modified to be more or less restrictive if
the analogous financial covenants in the Primary Credit Facility
are so removed, amended or otherwise modified.
The Note Purchase Agreement contains customary events of default
(subject in certain cases to specified cure periods), including
but not limited to payment defaults, cross defaults with certain
other indebtedness, breaches of covenants and bankruptcy events.
In the case of an event of default, the Purchasers may, among
other remedies, accelerate the payment of all obligations.
The above summary of the Note Purchase Agreement does not purport
to be complete and is qualified in its entirety by reference to
the full text of the Note Purchase Agreement. A copy of the Note
Purchase Agreement, including the form of Note, is attached as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated
herein by reference.
| Item9.01. | Financial Statements and Exhibits |
(d)Exhibits
|
Exhibit Number |
Description |
|
| 10.1* |
Note Purchase Agreement dated as of June7, 2017, among the Company, the Parent Guarantor and the institutions named in Schedule B thereto as purchasers. |
| * | Filed herewith |
About Terreno Realty Corporation (NYSE:TRNO)
Terreno Realty Corporation (Terreno) is a real estate investment trust. The Company acquires, owns and operates industrial real estate located in approximately six coastal United States markets, such as Los Angeles Area; Northern New Jersey/New York City; San Francisco Bay Area; Seattle Area; Miami Area, and Washington, D.C./Baltimore. The Company invests in various types of industrial real estate, including warehouse/distribution; flex, which include light industrial and research and development (R&D), and trans-shipment. The Company invests approximately 92.2% of its total portfolio square footage in warehouse or distribution; approximately 6.3% of its total portfolio square footage in flex, and approximately 1.5% of its total portfolio square footage in trans-shipment. Terreno owns approximately 150 buildings aggregating approximately 11.1 million square feet and over two improved land parcels consisting of approximately 3.5 acres.