Item 1.01
Entry into a Material Definitive Agreement.
Note Purchase Agreement
On June 15, 2016, CoreSite, L.P. (the Operating Partnership), the operating partnership of CoreSite Realty Corporation (the Company), issued and sold an aggregate principal amount of $150 million of its 4.19% Senior Notes due June 15, 2023 (the Notes) in a private placement to certain accredited investors conducted pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the Securities Act). The terms of the Notes are governed by a note purchase agreement, dated June 15, 2016 (the Note Purchase Agreement), by and among the Operating Partnership, the Company and the purchasers named therein.
Interest on the Notes is payable semiannually, on the 15th day of June and December in each year, commencing on December 15, 2016. The Notes are senior unsecured obligations of the Operating Partnership and are jointly and severally guaranteed by the Company and each of the Operating Partnerships subsidiaries that guarantees indebtedness under the Operating Partnerships senior unsecured credit facility (the Subsidiary Guarantors).
The Operating Partnership may prepay all or a portion of the Notes upon notice to the holders for 100% of the principal amount so prepaid plus a make-whole premium as set forth in the Note Purchase Agreement. Upon the occurrence of certain change of control events, holders of the Notes will have the right to require that the Operating Partnership purchase
such holders Notes in cash at a purchase price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.
The Note Purchase Agreement contains customary representations and warranties of the Operating Partnership, as well as certain covenants, including limitations on transactions with affiliates, merger, consolidation and sale of assets, liens and subsidiary indebtedness, and will require delivery of customary financial reports to the purchasers.
The Note Purchase Agreement also contains certain financial covenants, including: (i) maximum consolidated total unsecured indebtedness; (ii) minimum consolidated tangible net worth; (iii) a maximum ratio of consolidated total indebtedness to gross asset value; (iv) a minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges; and (v) a maximum ratio of secured indebtedness to gross asset value. In addition, on the date of the Note Purchase Agreement, certain additional financial covenants in the credit agreement governing the Operating Partnerships senior unsecured credit facility (the Credit Agreement) will be automatically incorporated into the Note Purchase Agreement, and, subject to certain conditions, these additional financial covenants will be deleted, removed, amended or otherwise modified to be more or less restrictive if the analogous covenant in the Credit Agreement is so deleted, removed, amended or otherwise modified. The aforementioned covenants are subject to a number of exceptions and qualifications set forth in the Note Purchase Agreement.
The Note Purchase Agreement also contains customary events of default (subject in certain cases to specified cure periods), including, but not limited to, non-payment, breach of
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covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments and ERISA events.
The proceeds from the Notes will be used to refinance existing debt and for general corporate purposes.
The Notes and the guaranties thereof will not be and have not been registered under the Securities Act or any state securities laws and may not be offered or sold absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
The foregoing description of the Note Purchase Agreement is a summary and is qualified in its entirety by reference to the terms of the Note Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01.
Amended and Restated Credit Agreement / Term Loan Agreement
As previously disclosed, on June 24, 2015, the Operating Partnership and certain subsidiary co-borrowers entered into a third amended and restated unsecured credit facility (the Credit Agreement) with a group of lenders for which KeyBank National Association acts as the administrative agent and Keybanc Capital Markets, RBC Capital Markets, LLC, Regions Capital Markets and TD Securities (USA) LLC act as joint lead arrangers and joint book managers. The Credit Agreement was amended on February 2, 2016.
On January 31, 2014, the Operating Partnership and certain subsidiary co-borrowers entered into a term loan agreement (the Term Loan Agreement and, together with the Credit Agreement, the Agreements) with a group of lenders for which Royal Bank of Canada acts as administrative agent and RBC Capital Markets and Regions Capital Markets act as joint lead arrangers and joint book mangers. The Term Loan Agreement was amended on June 25, 2015.
On June 15, 2016, each of the Agreements were further amended to, among other things, (i) permit the issuance of the Notes by the Operating Partnership and the guaranties thereof by the Company and the Subsidiary Guarantors and (ii) remove the subsidiary co-borrowers under the Agreements and cause them to become guarantors of the Operating Partnerships obligations under the Agreements on a joint and several basis with the Company (the Amendments).
The foregoing description of the Amendments is qualified in its entirety by reference to the full text of the Amendments attached as Exhibit 10.2 and 10.3 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included, or incorporated by reference, in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03 of this Current Report on Form 8-K.
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