Saul Centers Inc.
09/01/2021 | Press release | Distributed by Public on 09/01/2021 14:39
Amended And Restated Credit Agreement (Form 8-K)
Entry into a Material Definitive Agreement.
Saul Holdings Limited Partnership (the 'Partnership'), the operating partnership for Saul Centers, Inc., entered into that certain Credit Agreement dated August 31, 2021, by and among: the Partnership, as Borrower; Wells Fargo Bank, National Association ('Wells Fargo'), as Administrative Agent; Capital One, National Association ('Capital One'), as Syndication Agent; TD Bank, N.A. ('TD Bank') and U.S. Bank National Association ('U.S. Bank'), as Documentation Agents; and Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank, PNC Bank and Associated Bank, National Association ('Associated Bank'), as Lenders (the 'Agreement').
The Agreement replaces that certain Amended and Restated Credit Agreement dated January 26, 2018, by and among: the Partnership, as Borrower; Wells Fargo Bank, as Administrative Agent; Capital One, as Syndication Agent; TD Bank and U.S. Bank, as Documentation Agents; and Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank and Associated Bank, as Lenders (the 'Former Agreement').
The Former Agreement consisted of a $400,000,000 credit facility (the 'Former Facility'), of which $325,000,000 was a revolving credit facility (the 'Former Revolving Line') and $75,000,000 was a term loan (the 'Former Term Loan'). The Former Revolving Line was scheduled to mature on January 26, 2022, and the Former Term Loan was scheduled to mature on January 26, 2023.
The Agreement consists of a $525,000,000 credit facility (the 'New Facility'), of which $425,000,000 is a revolving credit facility (the 'Revolving Line') and $100,000,000 is a term loan (the 'Term Loan'). The Revolving Line matures on August 31, 2025, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on February 28, 2027, and may not be extended.
Saul Centers, Inc. and certain of its subsidiaries have guaranteed the payment obligations of the Partnership under the New Facility. For purposes of this Current Report on Form 8-K, all references to the 'Company' refer, collectively, to Saul Centers, Inc., the Partnership and each of their subsidiaries that are parties to the New Facility.
Currently, $197,000,000 is outstanding under the New Facility, $100,000,000 of which is drawn under the Term Loan and $97,000,000 of which is drawn under the Revolving Line. The Revolving Line of $425,000,000 has $222,100,000 in borrowing availability and $185,000 committed for letters of credit; the Term Loan is fully drawn.
In general, loan availability under the New Facility is primarily determined by the operating income generated by the Company's existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 1.35% to 1.95% under the Revolving Line, and 1.30% to 1.90% under the Term Loan, each as determined by certain leverage tests. As of August 31, 2021, the applicable spread for borrowings is 1.40% under the Revolving Line and 1.35% under the Term Loan.
The Agreement, similar to the Former Agreement, contains several covenants related to the Company's ability to make investments, incur liens, engage in certain affiliate transactions, and engage in major transactions such as mergers. In addition, the Agreement requires the Company to satisfy certain financial covenants, including, but not limited to:
•limiting the amount of debt so that the ratio of Total Indebtedness to Total Asset Value (each as defined in the Agreement) does not exceed 0.60 to 1.00;
•limiting the amount of debt so that interest coverage is not less than 2.0 to 1 on a trailing four consecutive fiscal quarters basis; and
•limiting the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage is not less than 1.4 to 1 on a trailing four consecutive fiscal quarters basis.
Each of Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank, PNC Bank and Associated Bank is a lender under the Agreement. Some of the lenders or their affiliates from time to time have provided in the past, and may provide in the future, commercial lending and/or banking services to the Company and its affiliates in the ordinary course of business.
The foregoing does not constitute a complete summary of the terms and conditions of the Agreement, which is attached hereto as Exhibit 10.1, or of the Former Agreement, which was attached as Exhibit 10.1 to the Company's Current Report on Form 8K, dated January 26, 2018. The description contained herein of the terms and conditions of the Agreement and the Former Agreement is qualified in its entirety by reference to the Agreement and Former Agreement, respectively.
Termination of a Material Definitive Agreement.
The disclosure required by this Item 1.02 is included in Item 1.01 and incorporated herein by reference.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this Item 2.03 is included in Item 1.01 and incorporated herein by reference.
Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description |
| 10.1 | |
| 10.2 |