ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The information in this Current Report on Form 8-K set forth under Item 2.03 is
incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On June 23, 2014, Kilroy Realty, L.P. (the "Operating Partnership"), entered
into an Amended and Restated Credit Agreement (the "Credit Agreement") with J.P.
Morgan Securities LLC ("J.P. Morgan"), Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and Wells Fargo Securities, LLC ("Wells Fargo"),
as Joint Lead Arrangers and Joint Bookrunners, and other lending institutions
that are parties to the Credit Agreement (collectively, with J.P. Morgan,
Merrill Lynch and Wells Fargo, the "Banks"), and JPMorgan Chase Bank, N.A., as
administrative agent, and Bank of America, N.A., as syndication agent, for the
The Credit Agreement consists of a $600 million unsecured revolving loan
facility (the "Revolving Loan") and a $150 million unsecured term loan facility
(the "Term Loan") and an accordion option that permits the total amount of the
credit facilities to be increased to $1.1 billion. The Operating Partnership's
obligations under the Credit Agreement are guaranteed by the Operating
Partnership's general partner, Kilroy Realty Corporation (the "Company").
The Operating Partnership expects to use the proceeds from the Revolving Loan
and the Term Loan for general corporate purposes, which may include funding its
acquisition, development and redevelopment programs, and repaying other
The Revolving Loan bears interest at an annual rate of LIBOR plus from 0.875% to
1.650%, or Base Rate (as defined in the Credit Agreement) plus from 0.000% to
0.650%, depending on the Company's credit ratings. In addition, the Company is
required to pay a facility fee from 0.125% to 0.300%, depending on the Company's
credit ratings. The Revolving Loan matures in July 2019.
The Term Loan bears interest at an annual rate of LIBOR plus from 0.900% to
1.900%, or Base Rate plus from 0.000% to 0.900%, depending on the Company's
credit ratings. The Term Loan matures in July 2019.
The Credit Agreement contains covenants and restrictions requiring the Operating
Partnership to meet certain financial ratios and to provide certain information
to the lenders. Some of the more restrictive financial covenants include a (i)
maximum total debt to total assets ratio, (ii) minimum fixed charge coverage
ratio, (iii) maximum secured debt to total assets ratio, (iv) minimum
unencumbered assets to unsecured debt ratio, (v) minimum unencumbered asset pool
debt service coverage ratio, (vi) maximum dividends, and (vii) minimum
consolidated tangible net worth. The Credit Agreement also contains limits on
the percentage of the total assets that are attributable to development assets,
joint ventures, and unimproved properties for purposes of calculating these
ratios. Non-compliance with one or more of the covenants and restrictions could
result in the full or partial principal balance of the Revolving Loan and Term
Loan becoming immediately due and payable.