Form 8-K COLUMBIA PROPERTY TRUST, For: Jul 30
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2015
Columbia Property Trust, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-36113
MD | 20-0068852 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) | |
One Glenlake Parkway, Suite 1200
Atlanta, GA 30328
(Address of principal executive offices, including zip code)
(404) 465-2200
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The information required by Item 1.01 is included in Item 2.03 below and is incorporated by reference herein.
Item 1.02. Termination of a Material Definitive Agreement.
The information required by Item 1.02 is included in Item 2.03 below and is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Term Loan Facilities
On July 30, 2015, Columbia Property Trust, Inc. (the “Registrant”), through a wholly owned subsidiary, Columbia Property Trust Operating Partnership, L.P. (the “Borrower”), replaced its existing $450 million term loan facility (the “Existing Term Loan”), which had a maturity date of February 3, 2016, with two separate term loans. The Borrower entered into a $300 million unsecured, single-draw term loan (the “$300 Million Term Loan”) with a syndicate of banks with J.P. Morgan Securities, LLC and PNC Capital Markets LLC serving as joint lead arrangers and joint book runners. The $300 Million Term Loan matures on July 31, 2020. The Borrower also entered into a $150 million unsecured, single-draw term loan (the “$150 Million Term Loan”; and together with the $300 Million Term Loan, the “Term Loan Facilities”) with a syndicate of banks with Wells Fargo Securities LLC, U.S. Bank National Association and Regions Capital Markets serving as joint lead arrangers and joint bookrunners. The $150 Million Term Loan matures on July 29, 2022.
The $300 Million Term Loan bears interest, at the Registrant's option, at the London Interbank Offered Rate (“LIBOR”), plus an applicable margin ranging from 0.90% to 1.75%, for LIBOR loans, or an alternate base rate, plus an applicable margin ranging from 0.00% to 0.75%, for base rate loans, based on the Borrower’s applicable credit rating. The $300 Million Term Loan and the JPMorgan Chase Credit Facility, as described below, provide for four accordion options for an aggregate amount of up to $400 million, subject to certain conditions. The $150 Million Term Loan bears interest, at the Registrant's option, at LIBOR, plus an applicable margin ranging from 1.40% to 2.35% for LIBOR Loans, or an alternate base rate, plus an applicable margin ranging from 0.40% to 1.35% for base rate loans, based on the Borrower’s applicable credit rating. The interest rate on the $150 Million Term Loan has been effectively fixed at 3.52% with an interest rate swap agreement. The $150 Million Term Loan provides for four accordion options for an aggregate amount of $300 million, subject to certain conditions.
The Existing Term Loan bore interest at LIBOR, plus an applicable margin ranging from 1.15% to 1.95% for LIBOR loans, or an alternate base rate, plus an applicable margin ranging from 0.15% to 0.95% for base rate loans, based on the Borrower’s applicable credit rating. Based on the terms of an existing interest rate swap, the interest rate on the Existing Term Loan was effectively fixed at 2.07%.
Under the Term Loan Facilities, certain of the Borrower’s covenants and financial restrictions have improved and thereby created additional flexibility for the Borrower, including the following:
• | The Term Loan Facilities improved the capitalization rate used to determine the estimated value of the Borrower’s properties for covenant purposes from 6.75% to 6.00% for certain properties, and 7.75% to 7.50% for other properties. |
• | The Term Loan Facilities reduced the capital reserve requirement used for purposes of covenant calculations from $1.00 per square foot per annum to $0.30 per square foot per annum for office properties and from $0.50 per square foot per annum to $0.15 per square foot per annum for industrial properties. |
• | The required fixed charge coverage ratio was reduced from 1.75:1.00 to 1.50:1.00. |
• | The maximum debt to total asset ratio was increased from fifty percent (50%) to sixty percent (60%) and additionally, subject to certain conditions, the covenant level may be further increased to sixty-five percent (65%) for four fiscal quarters following the acquisition of properties with a purchase price greater than 10% of the Borrower’s total asset value. |
• | The required unencumbered interest coverage ratio was reduced from 2.00:1.00 to 1.75:1.00. |
• | The required unencumbered asset coverage ratio was reduced from 2.00:1.00 to 1.66:1.00. |
• | The secured recourse debt to total asset value ratio was deleted in its entirety. |
Revolving Credit Facility
On July 30, 2015, the Registrant, through the Borrower, also replaced its revolving credit facility (the “JPMorgan Chase Credit Facility”) with J.P. Morgan Securities, LLC and PNC Capital Markets LLC serving as joint lead arrangers and joint book runners, to, among other things: (i) change the margins on the interest rate under the facility, as described below; (ii) extend the maturity date from August 2017 to July 2019 with two, six-month extension options; (iii) enable the Borrower to increase the JPMorgan Chase Credit Facility and the $300 Million Term Loan, as described above, by an aggregate amount of up to $400 million on four occasions; and (iv) revise certain covenants on the same terms as described above with respect to the Term Loan Facilities.
The JPMorgan Chase Credit Facility, as entered into on July 30, 2015, bears interest, at the Registrant's option, at LIBOR, plus an applicable margin ranging from 0.875% to 1.55% for LIBOR based borrowings, or an alternate base rate, plus an applicable margin ranging from 0.00% to 0.55% for base rate borrowings, based on the Borrower’s applicable credit rating. Previously, the applicable margin was a range from 1.00% to 1.70% for LIBOR based borrowings or a range from 0.00% to 0.70% for base rate borrowings. Additionally, the per annum facility fee on the aggregate revolving commitment now ranges from 0.125% to 0.30%, also based on the Borrower’s applicable credit rating. Prior to amendment, the per annum facility fee ranged from 0.15% to 0.35%.
Item 8.01. Other Events.
On July 30, 2015, the Registrant issued a press release announcing the closing of the New Term Loan Facilities and the JPMorgan Chase Credit Facility. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |
99.1 | Press Release dated July 30, 2015 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Columbia Property Trust, Inc. | ||
Dated: July 30, 2015 | By: | /s/ James A. Fleming |
James A. Fleming | ||
Executive Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts: | |
Tripp Sullivan | |
T 615-760-1104 | |
Jim Fleming | |
T 404-465-2200 | |
Columbia Property Trust Extends Maturities and Lowers Borrowing Costs
ATLANTA (July 30, 2015) - Columbia Property Trust, Inc. (NYSE: CXP) announced today it has recast a total of $950 million of unsecured debt with longer maturities and lower borrowing costs, including its $500 million revolving credit facility that originally matured in August 2017 and a $450 million term loan that originally matured in February 2016.
The new $500 million unsecured revolving credit facility matures in July 2019 with two six-month extension options and bears interest at a rate of 100 basis points over LIBOR based on current credit ratings. The new $300 million unsecured term loan matures in July 2020 and bears interest at 110 basis points over LIBOR. The new $150 million unsecured term loan matures in July 2022 and bears interest at 155 basis points over LIBOR, which the Company has fixed at 3.52% through an interest rate swap. Columbia also disclosed it recently paid off the $105 million loan secured by 100 E. Pratt in Baltimore that matured in June 2017, which combined with today’s announcements and other debt repayments, extended the Company’s weighted average debt maturities to six years and maintained its fixed-rate debt above 80% as well as its unsecured debt above 60% of total debt.
"We achieved strong execution, pricing and support for this financing from the 14 lenders in this syndication," said Jim Fleming, Executive Vice President and Chief Financial Officer of Columbia Property Trust. "With the benefit of our improved investment grade rating and continued enhancements to our balance sheet, we were able to reduce our borrowing costs, extend the weighted average maturity of our unsecured bank debt by more than 40 months, and eliminate any significant debt maturities until 2017."
J.P. Morgan Securities LLC and PNC Capital Markets LLC served as joint lead arrangers and joint bookrunners on both the revolving credit facility and the $300 million term loan, with JPMorgan Chase Bank, N.A. as administrative agent and PNC Bank, National Association as syndication agent. Wells Fargo Securities LLC, U.S. Bank National Association and Regions Capital Markets served as joint lead arrangers and joint bookrunners on the $150 million term loan, with Wells Fargo Bank, National Association as administrative agent and U.S. Bank National Association and Regions Bank as co-syndication agents.
About Columbia Property Trust
Columbia Property Trust is a fully integrated real estate investment trust that operates, manages, and acquires Class-A office buildings concentrated in CBD locations, with approximately half of its portfolio, as measured by annualized lease revenue, located in high-barrier primary markets. As of July 1, 2015, Columbia owned 27 office properties and one hotel, which included 40 buildings totaling 13.4 million square feet of office space. For more information about Columbia Property Trust, please visit www.ColumbiaPropertyTrust.com.
Forward-Looking Statements:
Certain statements contained in this press release other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this press release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make
distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in the Company's most recently filed Annual Report on Form 10-K for the year ended December 31, 2014, for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.
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