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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Unsecured Revolving Credit Facility
On September 8, 2017, Retail Opportunity Investments Corp. (the “
Company
”),
as the parent guarantor, and Retail Opportunity Investments Partnership, LP (the “
Operating Partnership
”), the
operating partnership subsidiary of the Company, as the borrower, entered into a Second Amended and Restated Credit Agreement (the
“
Credit Agreement Amendment
”) with KeyBank National Association, as Administrative Agent (the “
Administrative
Agent
”), Swing Line Lender and L/C Issuer, PNC Bank National Association and U.S. Bank National Association, as Co-Syndication
Agents and the other lenders party thereto (the “
lenders
”).
Pursuant to the Credit Agreement Amendment, the lenders agreed
to, among other things, (i) increase the aggregate commitments under the First Amended and Restated Credit Agreement dated
as of August 29, 2012, as amended (the “
Credit Agreement
”), to $600 million and increase the possible additional
commitments thereunder to an additional $600 million; and (ii) extend the initial maturity date of the Credit Agreement to
September, 2021, subject to two six-month extension options, which may be exercised by the Operating Partnership upon satisfaction
of certain conditions, including payment of extension fees.
The Credit Agreement Amendment also contained certain modifications to the covenants
contained in the Credit Agreement, including the removal of affirmative and negative covenants limiting investments, burdensome
agreements, prepayments of indebtedness and stock repurchases. Additionally, the Credit Agreement Amendment removed the following
financial covenants: (i) the limitation on minimum consolidated tangible net worth; (ii) the limitation on consolidated unencumbered
interest coverage ratio; and (iii) the limitation on consolidated secured recourse indebtedness. Other financial covenants were
amended as follows: (i) the previous covenant limiting quarterly distributions was replaced with a limitation on Restricted Payments
(as defined in the Credit Agreement Amendment) by the Operating Partnership or its subsidiaries after the occurrence and during
the continuance of any event of default, subject to certain exceptions, including payments required to maintain the Company’s
REIT status; (ii) permitting up to three elections by the Operating Partnership to allow the Company’s consolidated leverage
ratio (expressed as a percentage) to be as high as 65% for a period of up to two consecutive fiscal quarters immediately following
a Material Acquisition (as defined in the Credit Agreement Amendment); and (iii) permitting up to three elections by the Operating
Partnership to allow the Company’s consolidated unencumbered leverage ratio (expressed as a percentage) to be as high as
65% for a period of up to two consecutive fiscal quarters immediately following a Material Acquisition (as defined in the Credit
Agreement Amendment).
The foregoing description of the Credit Agreement Amendment is qualified in its entirety
by reference to the text of such agreement attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein
by reference.
Term Loan Facility
On September 8, 2017, the Company, as the Parent Guarantor,
and the Operating Partnership, as the Borrower, entered into a First Amended and Restated Term Loan Agreement (the “
Term
Loan Agreement Amendment
”) with KeyBank National Association, as Administrative Agent, BMO Capital Markets and Regions
Bank, as Co-Syndication Agents, Capital One, National Association, as Documentation Agent, and the other lenders party thereto.
Pursuant to the Term Loan Agreement Amendment, the lenders
agreed to, among other things, extend the maturity date of the Term Loan Agreement, dated as of September 29, 2015, as amended
(the “
Term Loan Agreement
”), to September, 2022, while maintaining the current aggregate commitments under
the Term Loan Agreement of $300 million and the possible additional commitments of $200 million.
The Term Loan Agreement Amendment also contained certain modifications to the covenants
contained in the Term Loan Agreement, including the removal of affirmative and negative covenants limiting investments, burdensome
agreements, prepayments of indebtedness and stock repurchases. Additionally, the Term Loan Agreement Amendment removed the following
financial covenants: (i) the limitation on minimum consolidated tangible net worth; (ii) the limitation on consolidated unencumbered
interest coverage ratio; and (iii) the limitation on consolidated secured recourse indebtedness. Other financial covenants were
amended as follows: (i) the previous covenant limiting quarterly distributions was replaced with a limitation on Restricted Payments
(as defined in the Term Loan Agreement Amendment) by the Operating Partnership or its subsidiaries after the occurrence and during
the continuance of any event of default, subject to certain exceptions, including payments required to maintain the Company’s
REIT status; (ii) permitting up to three elections by the Operating Partnership to allow the Company’s consolidated leverage
ratio (expressed as a percentage) to be as high as 65% for a period of up to two consecutive fiscal quarters immediately following
a Material Acquisition (as defined in the Term Loan Agreement Amendment); and (iii) permitting up to three elections by the
Operating Partnership to allow the Company’s consolidated unencumbered leverage ratio (expressed as a percentage) to be as
high as 65% for a period of up to two consecutive fiscal quarters immediately following a Material Acquisition (as defined in the
Term Loan Agreement Amendment).
The foregoing description of the Term Loan Agreement Amendment is qualified in its entirety
by reference to the text of such agreement attached as Exhibits 10.2 to this Current Report on Form 8-K and incorporated herein
by reference.