| 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 30, 2024, Piedmont Operating Partnership, LP (“Piedmont OP”), a consolidated subsidiary of Piedmont Office Realty Trust, Inc. (the “Registrant”), entered into a $200 million floating rate, unsecured, syndicated bank term loan facility (the “$200 Million Unsecured 2024 Term Loan”). Piedmont OP used the loan proceeds, along with proceeds from its $600 Million Unsecured 2022 Line of Credit, to repay (i) a $100 million bank term loan, which was scheduled to mature in December 2024, and (ii) $190 million of its $215 Million Unsecured 2023 Term Loan, which was scheduled to mature on January 31, 2024. The remaining $25 million of the $215 Million Unsecured 2023 Term Loan has been extended to January 31, 2025.
The term of the $200 Million Unsecured 2024 Term Loan is three years, with a scheduled maturity on January 29, 2027. 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 $200 Million Unsecured 2024 Term Loan.
The terms of the $200 Million Unsecured 2024 Term Loan, which are substantially the same as the terms of the $215 Million Unsecured 2023 Term Loan, are set forth in the Term Loan Agreement attached as Exhibit 10.1. The $200 Million Unsecured 2024 Term Loan has the option to bear interest at varying levels based on the Adjusted Daily Simple SOFR Rate (as defined in the Term Loan Agreement), the Adjusted Term SOFR Rate (as defined in the Term Loan Agreement), or a Base Rate (which is defined as the greatest of (i) the Prime Rate in effect on such day, (ii) the NYFRB Rate (as defined in the Term Loan Agreement) in effect on such day plus 1⁄2 of 1% and (iii) the Adjusted Term SOFR Rate for a one-month interest period plus 1%), in each case plus a stated interest rate spread. The stated interest rate spread for borrowings accruing interest based on the Adjusted Daily Simple SOFR Rate and the Adjusted Term SOFR Rate 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 $200 Million Unsecured 2024 Term Loan, the applicable interest rate for the loan was the Adjusted Daily Simple SOFR Rate plus 1.30%.
Under the terms of the $200 Million Unsecured 2024 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 $200 Million Unsecured 2024 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 30, 2024, by and among Piedmont Operating Partnership, LP, as Borrower, Piedmont Office Realty Trust, Inc., as Parent, Truist Securities, Inc,. as Joint Lead Arranger and Sole Book Manager, JP Morgan Chase Bank, N.A. and TD Bank, N.A,. as Joint Lead Arrangers, Truist Bank as Administrative Agent, JP Morgan Chase Bank, N.A. and TD Bank, N.A,. as Co-Syndication Agents, and Wells Fargo Bank, N.A,. as Documentation Agent, and the other financial institutions signatory thereto and their assignees, as Lenders. |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
