Item 1.01 Entry into a Material Definitive Agreement.
On July 19, 2017, American Assets Trust, Inc. (the “Company”) and American Assets Trust, L.P. (the “Operating Partnership”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with the various purchasers named therein (the “Purchasers”).
The Note Purchase Agreement provides for the private placement by the Operating Partnership of $100 million of 3.78% Senior Guaranteed Notes, Series F, due July 19, 2024 (the “Series F Notes”). The Series F Notes were issued on July 19, 2017, and will pay interest semi-annually on the 31
st
day of January and 31
st
day of July until their maturity.
The Operating Partnership may prepay at any time all, or from time to time any part of, the Series F Notes, in an amount not less than 5% of the aggregate principal amount of any series of the Series F Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the Note Purchase Agreement).
The Note Purchase Agreement contains a number of customary financial covenants, including, without limitation, tangible net worth thresholds, secured and unsecured leverage ratios and fixed charge coverage ratios. Subject to the terms of the Note Purchase Agreement and the Series F Notes, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal, Make-Whole Amount or interest under the Series F Notes, and (ii) a default in the payment of certain other indebtedness of the Operating Partnership, the Company or their subsidiaries, the principal and accrued and unpaid interest and the Make-Whole Amount on the outstanding Series F Notes will become due and payable at the option of the Purchasers.
The Operating Partnership’s obligations under the Series F Notes are fully and unconditionally guaranteed by the Company and certain of their subsidiaries.
The proceeds from the issuance of the Series F Notes will be used by the Operating Partnership to repay outstanding amounts on its credit facility and for general corporate purposes. The Series F Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The Operating Partnership offered and sold the Series F Notes in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
The above summary of the Note Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Agreement. A copy of the Note Purchase Agreement, including the form of the Series F Notes, is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.