MONMOUTH REAL ESTATE INVESTMENT CORP : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)
Item 1.01 Conclusion of a material definitive agreement.
Monmouth Real Estate Investment Corporation (“Monmouth” or the “Company”) has a fixed term loan agreement with Monmouth as the borrower, the surety from time to time, from the 15th party to it and JPMorgan Chase Bank, NA as the administrator and sole lead arranger Sole Book Runner (“JPMorgan”). The term loan agreement provides for an unsecured unsecured delayed draw credit facility of USD 175,000,000 that is compounded 140 basis points above LIBOR based on the company’s current leverage.
The loans issued under the fixed-term loan agreement are, at the company’s option, either (i) LIBOR plus 130 basis points to 200 basis points, depending on the leverage ratio of the company, or (ii) base rate plus 30 basis points up to 100 basis points, depending on the Company leverage ratio.
In addition, the company charges a commitment fee of 0.20% of the unused portion of the total amount committed under the fixed-term loan agreement and is due quarterly based on the outstanding loans and the unused portion of the total amount due in the Was committed within the framework of the loan agreement during the respective quarter.
The fixed-term loan agreement contains customary negative covenants similar to the company’s current amended and amended loan agreement dated 15th Sale of Assets and Other Fundamental Company Changes. In addition, the fixed-term loan agreement also requires the Company to meet various positive and financial obligations including, but not limited to, maintaining REIT status, a maximum leverage ratio, a minimum debt service coverage ratio, an unsecured leverage ratio, and a minimum net material value threshold . The Fixed Term Loan Agreement includes the same default events and remedies in the event of default as the A&R Loan Agreement, including expediting the amounts due under the Fixed Term Loan Agreement.
The company’s obligations under the fixed-term loan are guaranteed by each direct and indirect wholly-owned subsidiary of the company that owns an unencumbered real estate asset (as defined in the fixed-term loan).
JPMorgan has from time to time provided and may continue to provide various financial advisory, investment banking and general financing services to the Company for which JPMorgan has received and will receive customary fees and expenses.
The fixed-term credit agreement description in this updated report on Form 8-K is limited in its entirety by reference to the complete fixed-term credit agreement which is attached thereto as Appendix 10.1 and which is incorporated herein by reference.
Point 2.03 Creation of a direct financial obligation or an obligation from an off-balance sheet agreement of a registrant.
The information provided in section 1.01 of this current report on Form 8-K is incorporated into this section 2.03 by reference.
Item 9.01 Annual financial statements and annexes.
(d) exhibits. Annex No. 10.1 Fixed Term Loan Agreement dated December 15, 2021 between Monmouth Real Estate Investment Corporation as the borrower, the surety and lenders involved from time to time and JPMorgan Chase Bank, NA, as the administrative agent, sole head arranger and sole Book runner. 104 Cover Sheet Interactive Data File (embedded in the inline XBRL document) 2
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