Item 1.01. Entry into a Material Definitive
Agreement.
Second Amendment and Restatement of Credit
Facility
On April 8, 2022, Global Net Lease Operating
Partnership, L.P. (the “OP”), the operating partnership of Global Net Lease, Inc. (the “Company”), and certain
subsidiaries of the OP acting as guarantors (together with the Company, the “Guarantors”), entered into a second amendment
and restatement of the credit agreement (the “Second A&R Credit Agreement”) in respect of the Company’s existing
credit facility (the “Credit Facility”) with KeyBank National Association (“KeyBank”), as agent, and the other
lender parties thereto (together with KeyBank and any other lenders that may become parties, the “Lenders”).
Following
the closing of the Second A&R Credit Agreement, the Credit Facility consists solely of a senior unsecured multi-currency revolving
credit facility (the “Revolving Credit Facility”). Pursuant to the Second A&R Credit Agreement, the aggregate
total commitments under the Credit Facility were increased from $1.17 billion to $1.450 billion,
with a $50.0 million sublimit for letters of credit, a $50.0 million sublimit for swing loans and $100.0 million of which can only be
used for U.S. dollar loans. The Credit Facility includes an uncommitted “accordion feature” whereby, so long as no default
or event of default has occurred and is continuing, the Company has the right to increase the commitments under the Credit Facility,
allocated to either or both the Revolving Credit Facility or a new term loan facility, by up to an additional $500.0 million, subject
to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions.
The
Credit Facility is supported by a pool of eligible unencumbered properties that are owned by the subsidiaries of the OP that serve as
Guarantors. Pursuant to the Second A&R Credit Agreement, the availability of borrowings under the Revolving Credit Facility
continues to be based on the value of a pool of eligible unencumbered real estate assets owned by the Company and compliance with various
ratios related to those assets, and the Second A&R Credit Agreement also included amendments to provisions governing the calculation
of the value of the borrowing base.
The Credit Facility requires payments of interest
only prior to maturity. Borrowings under the Credit Facility bear interest at a variable rate per annum based on an applicable margin
that varies based on the ratio of consolidated total indebtedness to consolidated total asset value of the Company and its subsidiaries
plus either (i) the Base Rate (as defined in the Credit Facility) or (ii) the applicable Benchmark Rate (as defined in the Credit Facility)
for the currency being borrowed. Following the closing of the Second A&R Credit Agreement, the applicable interest rate margin is
based on a range from 0.30% to 0.90% per annum with respect to Base Rate borrowings under the Revolving Credit Facility and 1.30% to
1.90% per annum with respect to Benchmark Rate borrowings under the Revolving Credit Facility. These spreads reflect a reduction pursuant
to the Second A&R Credit Agreement from the previously applicable spreads. For Benchmark Rate Loans denominated in Dollars that bear
interest calculated by reference to Term SOFR, there is an additional spread adjustment depending on the length of the interest period.
In addition, pursuant to the Second A&R Credit Agreement, (i) if the Company achieves an investment grade credit rating from at least
two rating agencies, the OP can elect for the spread to be based on the credit rating of the Company, and (ii) the “floor”
on the applicable Benchmark is 0%.
The Credit Facility matures on April 8, 2026,
subject to the Company’s right, subject to customary conditions, to extend the maturity date by up to two additional six-month
terms. Prior to the execution of the Second A&R Credit Agreement, the Credit Facility had been scheduled to mature in August 2023,
subject to the Company extension options. Borrowings under the Credit Facility may be prepaid at any time, in whole or in part, without
premium or penalty, subject to customary breakage costs associated with borrowings for the applicable Benchmark Rate.
The Credit Facility contains events of default
relating to customary matters, including, among other things, payment defaults, covenant defaults, breaches of representations and warranties,
events of default under other material indebtedness, material judgments, bankruptcy events and change of control events, such as certain
changes to the composition of the Company’s board of directors and management. Upon the occurrence of an event of default, a majority
of the lenders have the right to accelerate the payment on any outstanding borrowings and other obligations.
The Guarantors have guaranteed, and any wholly
owned eligible direct or indirect subsidiary of the OP that directly or indirectly owns or leases a real estate asset added to the pool
of eligible unencumbered properties required to be maintained under the Credit Facility will be required to guarantee, the OP’s
obligations under the Credit Facility. For any Guarantor subsidiary of the OP, this guarantee will be released if the Company achieves
an investment grade credit rating from at least one rating agency, but will again be required (i) if the Company loses its investment
grade credit rating, or (ii) with respect to any Guarantor subsidiary of the Company, for so long as the subsidiary is the primary obligor
under or provides a guaranty to any holder of unsecured indebtedness.
The Credit Facility contains various customary
operating covenants, including covenants restricting, among other things, restricted payments (including dividends and share repurchases),
the incurrence of liens, the types of investments the Company may make, fundamental changes, agreements with affiliates and changes in
nature of business. The Credit Facility also contains financial maintenance covenants. Pursuant to the Second A&R Credit Agreement,
the Credit Facility will continue to have financial maintenance covenants with respect to maximum consolidated leverage, maximum consolidated
secured leverage, minimum fixed charge coverage, maximum secured recourse debt, maximum unencumbered leverage, unencumbered debt service
coverage and minimum net worth.
The
Company and certain of its subsidiaries have guaranteed the OP’s obligations under the Credit Agreement pursuant to one or more
guarantees (collectively, the “Guaranty”) and a related contribution agreement (the “Contribution Agreement”)
which governs contribution rights of the Guarantors in the event any amounts become payable under the Guaranty. In connection with the
Second A&R Credit Agreement, the Guaranty and the Contribution Agreement were also amended.
Certain of the lenders and their affiliates are
or have been lenders under other loans to the Company or agents under one or more of the Company's existing “at-the-market”
equity offering programs.
The
foregoing description does not purport to be a complete description and is qualified in its entirety by reference to the Second A&R
Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated by reference into this Item 1.01.