Item 1.01. Entry into a Material Definitive Agreement.
See discussion of the bank credit facility set forth below in Item 2.03, which 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.
• an interest rate on all borrowings based on LIBOR or a base rate plus a margin that varies according to
Host LP'sunsecured long-term debt rating, with such rate being (1) in the case of revolving credit facility borrowings, either LIBOR plus a margin ranging from 87.5 to 155 basis points or a base rate ranging from zero to 55 basis points and (2) in the case of the term loan facility borrowings, either LIBOR plus a margin ranging from 90 to 175 basis points or a base rate ranging from zero to 75 basis points; • in the case of the revolving credit facility, a facility fee payable on the total amount of the revolving credit facility commitment at a rate ranging from 12.5 to 30 basis points, with the actual rate determined according to Host LP'slong-term unsecured debt rating; • a maturity date of (1) in the case of the revolving credit facility, June 27, 2018, which date may be extended by up to a year by the exercise of up to two 6-month extension options, each of which is subject to certain conditions including the payment of an extension fee and (2) in the case of the term loan facility, June 27, 2017, which date may be extended up to two years by the exercise of up to two 1-year extension options, each of which is subject to certain conditions including the payment of an extension fee; • a foreign currency subfacility for Canadian Dollars, Australian Dollars, New Zealand Dollars, Japanese Yen, Euros, British Pounds Sterling and, if available to the lenders, Mexican Pesos of up to the foreign currency equivalent of $500,000,000, subject to a lower amount in the case of New Zealand Dollar and Mexican Pesos borrowings; • an option for Host LPto increase the aggregate principal amount of the revolving credit facility and/or term loan facility of the New Facility by up to $500,000,000, subject to obtaining additional loan commitments and satisfaction of certain conditions; • a subfacility of up to $100,000,000for swingline borrowings in U.S. Dollars, Canadian Dollars, Euros or British Pounds Sterling and a subfacility of up to $100,000,000for issuances of letters of credit; • no required scheduled amortization payments prior to the maturity date of the revolving credit facility or term loan facility, as applicable; and
• financial covenants (including covenants concerning leverage, fixed charge coverage and unsecured interest coverage) that are comparable to the Existing Facility, including (i) that our fixed charge coverage ratio may not be less than 1.25:1.00, (ii) our leverage ratio may not exceed 7.25:1.00 and (iii) our unsecured interest coverage ratio may not be less than 1.75:1.00 if our leverage ratio is less than 7.00:1.00 or 1.50:1.00 if our leverage ratio is greater than 7.00:1.00. The New Facility also includes financial covenant tests applicable to the incurrence of debt that are consistent with the limitations applicable under the indenture for our Series D senior notes.
Borrowings under the New Facility may be used for working capital and other general corporate purposes. As of
Pledges and Guarantees and effect on Senior Notes and Exchangeable Debentures
The New Facility does not initially include any subsidiary guarantees or pledges of equity interests, and such guarantees and pledges would be required only in the event that
Other Covenants and Events of Acceleration
The New Facility imposes restrictions on customary matters that were also restricted in the Existing Facility. As with the Existing Facility, certain covenants are less restrictive at any time that our leverage ratio is below 6.00:1.00. In particular, at any time that our leverage ratio is below 6.00:1.00, the covenants in respect of dividends are not applicable, and acquisition and investment transactions are generally permitted without limitation so long as, after giving effect to any such transaction, we are in compliance with the financial covenants under the New Facility.
The New Facility also includes usual and customary events of default for facilities of this nature, and provides that, upon occurrence and continuation of an event of default, payment of all amounts payable under the New Facility may be accelerated, and the lenders' commitments may be terminated. In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts payable under the New Facility will automatically become due and payable and the lenders' commitments will automatically terminate.
Existing Relationships with the Lenders
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 10.1 Second Amended and Restated Credit Agreement, dated as of
June 27, 2014, among Host Hotels & Resorts, L.P., certain Canadian subsidiaries of Host Hotels & Resorts, L.P., Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, Wells Fargo Bank, N.A., Deutsche Bank Securities Inc., The Bank of Nova Scotia, Bank of New York Mellon, Credit Agricole Corporate & Investment Bankand Goldman Sachs Bank USA as documentation agents, and various other agents and lenders.