| Item 1.01. | Entry into a Material Definitive Agreement |
The information set forth under Item 2.03, “Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant” is incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant |
On January 31, 2023, Piedmont Operating Partnership, LP (“Piedmont OP”), a consolidated subsidiary of Piedmont Office Realty Trust, Inc. (the “Registrant”), entered into a $215 million, floating-rate, unsecured term loan facility (the “$215 Million Unsecured 2023 Term Loan”). Piedmont OP intends to use the loan proceeds to repay the majority of its $350 Million Unsecured Senior Notes that mature on June 1, 2023, with the remaining balance repaid from a combination of cash on hand, proceeds from select property dispositions and/or borrowings under its $600 Million Unsecured 2022 Line of Credit.
The term of the $215 Million Unsecured 2023 Term Loan is one year, with an option to extend for an additional year for a final maturity date of January 31, 2025. Piedmont OP may prepay the loan in whole or in part, at any time without premium or penalty. Piedmont OP paid customary fees to the lenders in connection with the closing of the $215 Million Unsecured 2023 Term Loan.
The terms of the $215 Million Unsecured 2023 Term Loan are set forth in the Term Loan Agreement attached as Exhibit 10.1. As defined in the Term Loan Agreement, the $215 Million Unsecured 2023 Term Loan has the option to bear interest at varying levels based on Daily Simple SOFR, Term SOFR for an interest period selected by Piedmont OP of one or three months, or a Base Rate (which is defined as the greatest of (i) Bank of America’s prime rate, (ii) the Federal Funds Rate plus 1/2 of 1%, (iii) Term SOFR for a one-month period plus 1.0%, and (iv) 1.0%), in each case plus a stated interest rate spread. The stated interest rate spread for borrowings accruing interest based on Daily Simple SOFR and Term SOFR can vary from 0.85% to 1.70%, and the stated interest rate spread for borrowings accruing interest based on the Base Rate can vary from 0.00% to 0.70%, in each case based on the current credit rating of the Registrant or Piedmont OP, whichever is higher. As of the closing of the $215 Million Unsecured 2023 Term Loan, the applicable interest rate for the loan was Daily Simple SOFR plus 1.05%.
Under the terms of the $215 Million Unsecured 2023 Term Loan, Piedmont OP is subject to certain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75, an unencumbered leverage ratio of at least 1.60, a fixed charge coverage ratio of at least 1.50, a leverage ratio of no more than 0.60, and a secured debt ratio of no more than 0.40.
The foregoing does not purport to be a complete description of the terms of the $215 Million Unsecured 2023 Term Loan and is qualified in its entirety by reference to the Term Loan Agreement attached as Exhibit 10.1 hereto.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
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Exhibit
No. | | Description |
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| 10.1 | | Term Loan Agreement dated as of January 31, 2023, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, BofA Securities, Inc., JPMorgan Chase Bank, N.A., and TD Securities (USA) LLC, as Joint Lead Arrangers and Joint Bookrunners, Bank of America, N.A., as Administrative Agent, and the other financial institutions initially signatory thereto and their assignees |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
