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Item 1.01.
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Entry into a Material Definitive Agreement.
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On September 16, 2019, Healthcare Trust of America Holdings, LP (the “Operating Partnership”), the operating partnership subsidiary of Healthcare Trust of America, Inc. (NYSE: HTA) (“HTA” and together with the Operating Partnership, the “Company”) issued $250.0 million in aggregate principal amount of the Operating Partnership’s 3.500% Senior Notes due 2026 (the “2026 Notes”) and $650.0 million in aggregate principal amount of the Operating Partnership’s 3.100% Senior Notes due 2030 (the “2030 Notes” and, together with the 2026 Notes, the “Notes”) in a public offering (the “Offering”) through underwriters for whom BofA Securities, Inc., J.P. Morgan Securities LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC acted as representatives (the “Representatives”) pursuant to an underwriting agreement, dated September 5, 2019, among the Operating Partnership, HTA and the Representatives.
The Operating Partnership offered the 2026 Notes at 103.660% of the principal amount thereof, plus accrued interest from August 1, 2019 in the amount of $1,093,750.00, and offered the 2030 Notes at 99.658% of the principal amount thereof. The Notes are general unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future senior unsecured and unsubordinated indebtedness, including the Operating Partnership’s 3.38% Senior Notes due 2021 (the “2021 Notes”), 2.95% Senior Notes due 2022 (the “2022 Notes”), 3.70% Senior Notes due 2023 (the “2023 Notes”), existing 3.500% Senior Notes due 2026 (the “Existing 2026 Notes”) and 3.75% Senior Notes due 2027 (the “2027 Notes”), and senior in right of payment to any of the Operating Partnership’s subordinated indebtedness. As a result, the Notes are effectively subordinated in right of payment to all of the Operating Partnership’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and structurally subordinated in right of payment to all existing and future liabilities and other indebtedness, whether secured or unsecured, of the Operating Partnership’s subsidiaries. The 2026 Notes bear interest at the rate of 3.500% per year, accruing from and including August 1, 2019, payable semi-annually in arrears on February 1 and August 1 of each year, beginning February 1, 2020. The 2026 Notes will mature on August 1, 2026. The 2030 Notes bear interest at the rate of 3.100% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2020. The 2030 Notes will mature on February 15, 2030.
The 2026 Notes were issued pursuant to an indenture, dated as of July 12, 2016 (the “2026 Notes Indenture”), and the 2030 Notes were issued pursuant to an indenture, dated as of September 16, 2019 (the “2030 Notes Indenture” and, together with the 2026 Notes Indenture, the “Indentures”), each as among the Operating Partnership, as issuer, HTA, as guarantor, and U.S. Bank National Association, as trustee. The Indentures contain various restrictive covenants, including limitations on the Operating Partnership’s ability to incur additional indebtedness, requirements to maintain a pool of unencumbered assets and requirements to maintain insurance with financially sound and reputable insurance companies.
The Operating Partnership’s obligations under the Notes are fully and unconditionally guaranteed by HTA. However, with respect to the 2030 Notes, HTA will be automatically and unconditionally released and discharged from its guarantee obligations upon the release of all guarantees by HTA of the 2021 Notes, the 2022 Notes, the 2023 Notes, the 2026 Notes (including the Existing 2026 Notes) and the 2027 Notes and the Operating Partnership’s $1,300.0 million unsecured revolving credit and term loan facility and any additional guarantees by HTA of senior unsecured indebtedness.
The 2026 Notes and the 2030 Notes are redeemable at the Operating Partnership’s option and in its sole discretion, at any time or from time to time prior to May 1, 2026 and November 15, 2029, respectively, in whole or in part, at a redemption price equal to the greater of:
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100% of the principal amount of the Notes being redeemed; or
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the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date at the adjusted treasury rate (determined in accordance with the applicable Indenture) plus 0.35% for the 2026 Notes and 0.25% for the 2030 Notes,
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plus, in each case, accrued and unpaid interest thereon to the applicable redemption date; provided, however, that if the redemption date falls after a record date and on or prior to the corresponding interest payment date, the Operating Partnership will pay the full amount of accrued and unpaid interest, if any (plus additional interest, if applicable), on such interest payment date to the holder of record at the close of business on the corresponding record date (instead of the holder surrendering its Notes for redemption).
Notwithstanding the foregoing, if the Notes are redeemed on or after May 1, 2026 for the 2026 Notes, or November 15, 2029 for the 2030 Notes, the redemption price will be equal to 100% of the principal amount of the applicable series of Notes being redeemed, plus accrued and unpaid interest thereon to the applicable redemption date.
Each Indenture provides that the following events are considered events of default, which may result in the accelerated maturity of the Notes issued under such Indenture, including:
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a default for 90 days in the payment of any installment of interest under such Notes;
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a default in the payment of the principal amount or redemption price due with respect to such Notes, when the same becomes due and payable; provided, however, that a valid extension of the maturity of such Notes in accordance with the terms of the Indenture shall not constitute a default in the payment of principal;
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the Operating Partnership’s failure to comply with any of its other agreements in such Notes or the Indenture upon receipt by the Operating Partnership of notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of such Notes then outstanding and the Operating Partnership’s failure to cure (or obtain a waiver of) such default within 90 days after the Operating Partnership receives such notice;
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with respect to the 2026 Notes only, failure to pay any indebtedness for money borrowed by the Operating Partnership, HTA or any of the Operating Partnership’s Significant Subsidiaries (as defined in Rule 1-02(w) of Regulation S-X promulgated by the SEC as in effect on the original issue date of the 2026 Notes) in an outstanding principal amount in excess of $35.0 million at final maturity or upon acceleration after the expiration of any applicable grace period, which indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within 30 days after written notice to the Operating Partnership from the trustee (or to the Operating Partnership and the trustee from holders of at least 25% in principal amount of the outstanding 2026 Notes);
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with respect to the 2030 Notes only, failure to pay any indebtedness for money borrowed by the Operating Partnership, HTA or any of the Operating Partnership’s Significant Subsidiaries (as defined in Rule 1-02(w) of Regulation S-X promulgated by the SEC as in effect on the original issue date of the 2030 Notes) in an outstanding principal amount in excess of $50.0 million at final maturity or upon acceleration after the expiration of any applicable grace period, which indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within 30 days after written notice to the Operating Partnership from the trustee (or to the Operating Partnership and the trustee from holders of at least 25% in principal amount of the outstanding 2030 Notes); provided, however, that $50.0 million will be replaced by $35.0 million for so long as any of the 2026 Notes, 2023 Notes or 2021 Notes are outstanding; and
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certain events of bankruptcy, insolvency or reorganization or court appointment of a receiver, liquidator or trustee of the Operating Partnership, HTA or any of the Operating Partnership’s Significant Subsidiaries or any substantial part of their respective property.
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The 2030 Notes Indenture, filed as Exhibit 4.1 hereto, is incorporated by reference herein. The 2026 Notes Indenture was previously filed with the Securities and Exchange Commission as Exhibit 4.1 to the Operating Partnership’s Current Report on Form 8-K filed on July 12, 2016, and is filed as Exhibit 4.2 hereto and incorporated by reference herein. The foregoing description of the Indentures, the Notes and the guarantees of the Notes by HTA is qualified in its entirety by reference to the Indentures and the forms of Notes and guarantees of the Notes therein.
O’Melveny & Myers LLP issued an opinion as to certain tax matters with respect to the Offering, which opinion is filed as Exhibit 8.1 to this Current Report on Form 8-K and is incorporated by reference herein.
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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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The information contained under Item 1.01 above is incorporated by reference into this Item 2.03.