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 March 4, 2019, the Company, CBRE Services, Inc., a subsidiary of the Company (“Services” or the “U.S. Borrower”), certain subsidiaries of Services, the lenders party thereto, and Credit Suisse AG (“Credit Suisse”), as administrative agent, entered into an Incremental Assumption Agreement (the “Assumption Agreement”) with respect to that certain Credit Agreement, dated as of October 31, 2017 (as previously amended, the “Credit Agreement”), among the Company, Services, certain subsidiaries of Services, the lenders party thereto and Credit Suisse, as administrative agent.
The Assumption Agreement was entered into for purposes of, among other things, (i) extending the maturity of the U.S. dollar denominated tranche A term loans currently outstanding under the Credit Agreement, (ii) extending the termination date of the revolving credit commitments currently available under the Credit Agreement and (iii) making certain changes to the interest rates and fees applicable to such tranche A term loans and revolving credit commitments. The Assumption Agreement provides for the following credit facilities, the proceeds of which were used to repay in full the tranche A term loans outstanding and replace in full the revolving commitments available, as applicable, under the Credit Agreement:
| | • | | a $300 million U.S. dollar denominated tranche A term loan facility; and |
| | • | | a revolving credit facility of up to $2.8 billion, including an allowance for borrowings outside of the United States, with (i) a $200 millionsub-facility allowing for multicurrency revolving borrowings available to the U.S. Borrower (Services), the Canadian Borrower (CBRE Limited), the Australian Borrower (CBRE Pty Limited) and the New Zealand Borrower (CBRE Limited) and (ii) a $300 millionsub-facility allowing for U.K. revolving loans to the U.S. Borrower and the U.K. Borrower (CBRE Limited). |
The revolving credit facility includes borrowing capacity (i) of up to $200 million for letters of credit and (ii) up to $5 million for short-term borrowings (referred to as swingline loans) available to the New Zealand Borrower.
The terms and conditions with respect to the Euro-denominated tranche A term loans outstanding under the Credit Agreement were not modified or otherwise impacted by the Assumption Agreement.
Interest Rate
Borrowings under the U.S. dollar denominated tranche A term loans and revolving credit commitments under the Credit Agreement bear interest at a rate equal to an applicable rate plus, at the applicable borrowers’ option, either (1) a base rate determined by reference to the greatest of (a) the prime rate determined by Credit Suisse, (b) the federal funds rate plus 1/2 of 1% and (c) the sum of (i) a reserve adjusted LIBO rate determined by reference to the ICE Benchmark Administration Interest Settlement Rates for deposits in U.S. dollars, pounds or euro, as applicable, for an interest period of one month plus (ii) 1.00% or (2) a reserve adjusted LIBO rate determined by reference to the ICE Benchmark Administration Interest Settlement Rates for deposits in U.S. dollars, pounds or euro, as applicable, for the applicable interest period.
The applicable rate for borrowings with respect to the U.S. dollar tranche A term loan facility and revolving credit facility are based on the Company’s credit ratings in accordance with the table below.
In addition to paying interest on outstanding principal under the U.S. dollar tranche A term loan facility and revolving credit facility, the U.S. Borrower is required to pay a facility fee to the lenders under the revolving credit facility (whether drawn or undrawn), which facility fee is based on the Company’s credit ratings in accordance with the table below. The applicable borrowers must also pay customary letter of credit fees.
