ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 11, 2018, Kilroy Realty, L.P., a Delaware limited partnership (the “Operating Partnership”), entered into a Note Purchase Agreement, dated as of May 11, 2018, with the purchasers named therein (the “2018 Note Purchase Agreement”), in connection with the issuance and sale of $50,000,000 principal amount of the Operating Partnership’s 4.30% Senior Notes, Series A, due July 18, 2026 (the “Series A Notes”), and $200,000,000 principal amount of the Operating Partnership’s 4.35% Senior Notes, Series B, due October 18, 2026 (the “Series B Notes” and, together with the Series A Notes, the “Notes”).
In connection with the issuance of the Notes, Kilroy Realty Corporation, a Maryland corporation and the general partner of the Operating Partnership (the “Company”), will enter into a General Partner Guaranty Agreement (the “NPA Guaranty Agreement”), pursuant to which the Company will absolutely and unconditionally guarantee the payment by the Operating Partnership of all amounts due with respect to the Notes and the performance by the Operating Partnership of its obligations under the 2018 Note Purchase Agreement.
For a brief description of the material terms of the 2018 Note Purchase Agreement, the Series A Notes, the Series B Notes and the NPA Guaranty Agreement, please see Item 2.03 of this Current Report on Form8-K, which is incorporated by reference into this Item 1.01. A copy of the 2018 Note Purchase Agreement, including the form of the Series A Notes, the form of the Series B Notes and the form of the NPA Guaranty Agreement, is attached to this Current Report on Form8-K as Exhibit 10.1 and is incorporated herein by reference. Additionally, on May 14, 2018, the Company issued a press release related to the Operating Partnership’s entry into the 2018 Note Purchase Agreement, the issuance and sale of the Notes and the Company’s entry into the NPA Guaranty Agreement. A copy of the press release is filed herewith as Exhibit 99.1.
In addition, on May 11, 2018, the Operating Partnership entered into an Amendment to the Note Purchase Agreement dated as of September 14, 2016 (the “2016 Note Purchase Agreement”), with the purchasers named therein (the “2016 Note Purchase Agreement Amendment”), pursuant to which the terms and conditions of the 2016 Note Purchase Agreement were amended to conform to the terms and conditions contained in the 2018 Note Purchase Agreement. A copy of the 2016 Note Purchase Agreement Amendment is attached to this Current Report on Form8-K as Exhibit 10.2 and is incorporated herein by reference. The foregoing descriptions of the material terms of the 2016 Note Purchase Agreement Amendment, and the transactions contemplated thereby, do not purport to be complete and are qualified in their entirety by reference to Exhibit 10.2 to this Current Report on Form8-K.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER ANOFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information reported under Item 1.01 of this Current Report on Form8-K is incorporated by reference into this Item 2.03.
By July 20, 2018, the Operating Partnership expects to issue $50,000,000 principal amount of its Series A Notes, and by October 22, 2018, the Operating Partnership expects to issue $200,000,000 principal amount of its Series B Notes pursuant to the 2018 Note Purchase Agreement. The Series A Notes mature on July 18, 2026, and the Series B notes mature on October 18, 2026, unless earlier redeemed or prepaid pursuant to the terms of the 2018 Note Purchase Agreement. Interest on the Notes is payable semi-annually in arrears on April 18 and October 18 of each year beginning April 18, 2019.
The Notes are senior unsecured obligations of the Operating Partnership. The Operating Partnership intends to use the net proceeds from the offering of the Notes for general corporate purposes, including funding development projects.
The Operating Partnership may, at its option and upon notice to the purchasers of the applicable Notes, prepay at any time all, or from time to time any part of, any series of Notes then outstanding (in an amount not less than 5% of the aggregate principal amount of any series of Notes then outstanding in the case of a partial prepayment), at 100% of the principal amount so prepaid, plus the make-whole amount determined for the prepayment date with respect to such principal amount as set forth in the 2018 Note Purchase Agreement.
