Item 1.01. Entry into a Material Definitive Agreement.
On April 26, 2019, NSREIT CB Loan, LLC, CB Loan
NT-II,
LLC, CLNC Credit 3, LLC, CLNC Credit 4,
LLC, CLNC Credit 3EU, LLC and CLNC Credit 3UK, LLC (collectively, Seller), each an indirect wholly-owned subsidiary of Colony Credit Real Estate, Inc. (CLNC), entered into an Amended and Restated Master Repurchase Agreement
(the Repurchase Agreement) with Citibank, N.A. (Citibank) that amended and restated that certain Master Repurchase Agreement dated April 23, 2018. As described in more detail in the Repurchase Agreement documentation,
the Repurchase Agreement provides up to $400.0 million to finance first mortgage loans, senior loan participations and other commercial mortgage loan debt instruments secured by commercial real estate that may be located in the United States,
Belgium, France, Germany, Ireland, Luxembourg, the Netherlands, the United Kingdom, Spain, or any other jurisdiction approved by Citibank. The transactions contemplated under the Repurchase Agreement may be denominated in U.S. Dollars, Pounds
Sterling, Euro or any other currency approved by Citibank.
With respect to assets located in the United States, advances under the
Repurchase Agreement accrue interest at per annum rates ranging from the
one-month
London Interbank Offered Rate, plus a spread to be determined on a case by case basis between Seller and Citibank. For assets
for which the applicable currency is Pounds Sterling, advances under the Repurchase Agreement accrue interest at per annum rates ranging from the three-month London Interbank Offered Rate, plus a spread to be determined on a case by case basis
between Seller and Citibank. For assets for which the applicable currency is Euro, advances under the Repurchase Agreement accrue interest at per annum rates ranging from the three-month Euro Interbank Offered Rate, plus a spread to be determined on
a case by case basis between Seller and Citibank.
The initial maturity date of the Repurchase Agreement is April 23, 2021, with two
(2) one-year
extensions at Sellers option, which may be exercised upon the satisfaction of certain conditions set forth in the Repurchase Agreement. The Repurchase Agreement will act as a revolving credit
facility that can be paid down and subsequently
re-drawn
subject to the satisfaction of customary conditions precedent. In addition, Citibank may stop making advances under the Repurchase Agreement if any
conditions precedent to funding are not satisfied.
In connection with the Repurchase Agreement, Credit RE Operating Company, LLC
(Guarantor), Seller and Citibank entered into an Omnibus Amendment of Other Transaction Documents and Reaffirmation of Guaranty (the
Reaffirmation Agreement
), which reaffirmed Guarantors obligations under a
Guaranty with Citibank (the Guaranty), under which the Guarantor agreed to guaranty Sellers payment and performance obligations under the Repurchase Agreement. Subject to certain exceptions, the maximum liability under the Guaranty
will not exceed 25% of the aggregate repurchase price of all purchased assets under the Repurchase Agreement.
The Repurchase Agreement
and Guaranty contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the Guaranty contains financial covenants that require
Guarantor to maintain: (i) minimum liquidity of not less than the lower of (x) $50.0 million and (y) the greater of (A) $10.0 million and (B) 5% of Guarantors recourse indebtedness; (ii) tangible net worth of not less
than $2,105.0 million plus 75% of the net cash proceeds of any equity issuance by CLNC after the date of the Repurchase Agreement; (iii) indebtedness not to exceed 75% of total assets; and (iv) a ratio of EBITDA to fixed charges of
not less than 1.40 to 1.00.
The foregoing summary does not purport to be a complete description and is qualified in its entirety by
reference to the Repurchase Agreement, the Guaranty and the Reaffirmation Agreement, which are filed as exhibits to this Current Report on Form
8-K.