This Current Report on Form 8-K is filed by CBRE Group, Inc., a Delaware corporation (the “Company” or “CBRE”), in connection with the matters described herein.
| Item 1.01 | Entry into a Material Definitive Agreement |
Amendment No. 2 to Credit Agreement
On August 5, 2022, the Company, CBRE Global Acquisition Company, a société à responsabilité limitée organized under the laws of the Grand Duchy of Luxembourg (the “Luxembourg Borrower”), the lenders party thereto, Credit Suisse AG, Cayman Islands (“Credit Suisse” or the “Resigning Agent”) and Wells Fargo Bank, National Association (“Wells Fargo” or the “Successor Agent”), entered into that certain Amendment No. 2 (the “Amendment”) to that certain Credit Agreement, dated as of October 31, 2017 (as previously amended, modified or otherwise supplemented prior to the date hereof, the “Existing Credit Agreement”, and, as further amended by the Amendment, the “Amended Credit Agreement”), among the Company, CBRE Services, Inc., a Delaware corporation (“Services”), CBRE Limited, a limited company organized under the laws of England and Wales (“CBRE Limited”), CBRE Limited, a corporation organized under the laws of the province of New Brunswick (“CBRE New Brunswick”), CBRE Pty Limited, a company organized under the laws of Australia and registered in New South Wales (“CBRE Pty Limited”), CBRE Limited, a company organized under the laws of New Zealand (“CBRE New Zealand”), the Luxembourg Borrower, the lenders from time to time party thereto and Credit Suisse, as administrative agent. Each of the Luxembourg Borrower, Services, CBRE Limited, CBRE New Brunswick, CBRE Pty Limited and CBRE New Zealand are direct or indirect wholly owned subsidiaries of the Company.
The Amendment was entered into for the purposes of, among other things, (i) amending certain of the representations and warranties, affirmative covenants and negative covenants in the Existing Credit Agreement, in a manner consistent with the new 5-year senior unsecured Revolving Credit Agreement (as defined below), (ii) terminating all revolving commitments previously available to the subsidiaries of the Company thereunder and (iii) reflecting the resignation of the Resigning Agent and the appointment of the Successor Agent as administrative agent under the Amended Credit Agreement. After giving effect to the Amendment, (i) the revolving commitments previously available under the Existing Credit Agreement will now be available under the Revolving Credit Agreement and (ii) the Euro-denominated tranche A term loan of the Luxembourg Borrower with a remaining aggregate principal amount of approximately €400 million maturing in December 2023 will be the sole remaining debt obligation of the Company and its subsidiaries under the Existing Credit Agreement.
Revolving Credit Agreement
On August 5, 2022, the Company entered into a new 5-year senior unsecured Revolving Credit Agreement (the “Revolving Credit Agreement”), by and among the Company, Services, the lenders party thereto, the issuing lenders party thereto and Wells Fargo, as administrative agent for the lenders. The Revolving Credit Agreement provides for a senior unsecured revolving credit facility available to Services with commitments in an aggregate principal amount of up to $3.5 billion, which commitments replaced in full and increased the revolving commitments previously available under the Existing Credit Agreement by $350 million.
The Revolving Credit Agreement includes capacity for letters of credit of an outstanding aggregate amount not to exceed $300 million.
On August 5, 2022, Services made an initial borrowing of $220 million under the Revolving Credit Agreement. These proceeds, in addition to cash on hand, were used to repay in full all revolving credit borrowings outstanding under the Existing Credit Agreement.
Interest Rate and Fees
The Revolving Credit Agreement provides that loans will bear interest at (i) a rate equal to an applicable rate, plus, (ii) 10 basis points, plus (iii) at Services’ option, either (a) a Term SOFR rate published by CME Group Benchmark Administration Limited for the applicable interest period or (b) a base rate determined by reference to the greatest of (1) the prime rate determined by Wells Fargo, (2) the federal funds rate plus 1/2 of 1% and (3) the sum of (x) a Term SOFR rate published by CME Group Benchmark Administration Limited for an interest period of one month and (y) 1.00%.
