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KILROY REALTY, L.P. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

June 27, 2014



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 Banks.

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 long-term debt.

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.

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Source: Edgar Glimpses


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