This Current Report on Form8-K is filed by CBRE Group, Inc., a Delaware corporation (the “Company”), in connection with the matters described herein.
| Item 1.01 | Entry into a Material Definitive Agreement |
On December 20, 2018, the Company, CBRE Services, Inc., a subsidiary of the Company (“Services”), certain subsidiaries of Services, the lenders party thereto, and Credit Suisse AG (“Credit Suisse”), as administrative agent, entered into an Incremental Term Loan Assumption Agreement (the “Assumption Agreement”) with respect to that certain Credit Agreement, dated as of October 31, 2017 (the “Credit Agreement”), among the Company, Services, certain subsidiaries of Services, the lenders party thereto and Credit Suisse, as administrative agent.
The Assumption Agreement provides for a new €400 million Euro denominated term loan facility (the loans thereunder, “New Euro Term Loans”) incurred as an incremental term loan under the Credit Agreement, the proceeds of which were drawn by a subsidiary of Services organized under the laws of Luxembourg (the “Luxembourg Borrower”) and used to repay a portion of the U.S. Dollar denominated term loans outstanding under the Credit Agreement.
Interest Rate
The New Euro Term Loans bear interest at a rate equal to 0.75% plus a reserve adjusted EURIBOR rate determined by the European Money Market Institute (or any other person that takes over the administration of such rate) as the rate at which interbank deposits in Euro are being offered by one prime bank to another within the EMU zone for the applicable interest period.
Prepayments
The Luxembourg Borrower may voluntarily repay New Euro Term Loans at any time without premium or penalty (other than as described in the following sentence). All prepayments of New Euro Term Loans shall be subject to certain customary “breakage” costs.
Maturity
The entire principal amount of the New Euro Term Loans outstanding (if any) is due and payable in full at maturity on December 20, 2023.
Guarantee
All obligations of the Luxembourg Borrower with respect to the New Term Loans under the Credit Agreement are unconditionally guaranteed by the Company, each of its direct and indirect U.S. material subsidiaries which guarantee any other material indebtedness of the Company and its subsidiaries and by certainnon-U.S. subsidiaries of the Company.
Covenants and Events of Default
The Credit Agreement includes financial covenants requiring the Company and its subsidiaries to maintain a maximum leverage ratio and minimum interest coverage ratio. In addition, the Credit Agreement also contains other customary affirmative and negative covenants and events of default.
The descriptions of the New Euro Term Loans, the Credit Agreement and guarantees above are summaries and are qualified in their entirety by the Assumption Agreement, filed as Exhibit 10.1 to this Current Report on Form8-K, the Credit Agreement, filed with the Securities and Exchange Commission (“SEC”) on November 1, 2017 as Exhibit 10.1 to the Current Report on Form8-K and the Guarantee Agreement, dated as of October 31, 2017, among the Company, Services, certain subsidiaries of Services and Credit Suisse, as administrative agent, filed with the SEC on November 1, 2017 as Exhibit 10.2 to the Current Report on Form8-K, each of which are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 of this Current Report on Form8-K is hereby incorporated by reference into this Item 2.03.
