This Current Report on Form 8-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 February 20, 2024, CBRE Services, Inc. (“Services”), a Delaware corporation and wholly-owned subsidiary of the Company, issued $500 million in aggregate principal amount of 5.500% Senior Notes due 2029 (the “Notes”) guaranteed on a full and unconditional basis by the Company. The Notes are governed by an Indenture, dated as of March 14, 2013 (the “Base Indenture”), among Services, the Company, certain of Services’ subsidiaries and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended and supplemented by the Ninth Supplemental Indenture entered into among Services, the Company and the Trustee on February 23, 2024 (the “Ninth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).
The Notes were sold pursuant to an underwriting agreement, dated as of February 20, 2024 (the “Underwriting Agreement”), among Services, the Company and Wells Fargo Securities, LLC, BofA Securities, Inc. and HSBC Securities (USA) Inc. on behalf of the several underwriters listed in Schedule A thereto. The Company intends to use the net proceeds from this offering to finance in part the acquisition of J&J Worldwide Services. The Notes were offered pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-276141) filed with the Securities and Exchange Commission (the “SEC”), as supplemented by the prospectus supplement, dated February 20, 2024.
The Notes will mature on April 1, 2029 and bear interest at a rate of 5.500% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2024.
As of February 23, 2024 (the “Issue Date”), the Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company. After the Issue Date, certain of the Services’ subsidiaries will be required to fully and unconditionally guarantee the Notes on a senior unsecured basis if such subsidiaries guarantee other of Services’ indebtedness above a specified amount. The guarantees by each guarantor of the Notes will rank equal in right of payment with all existing and future senior indebtedness of such guarantor.
The Notes are senior unsecured obligations of Services. The Notes rank equal in right of payment with Services’ existing and future senior indebtedness and senior in right of payment to any of Services’ future subordinated indebtedness. The Notes and related guarantees will be effectively subordinated to all of Services’ and such guarantors’ secured debt (if any) to the extent of the value of the assets securing such debt.
The Indenture contains covenants that limit Services’ ability and the ability of certain of Services’ subsidiaries to (i) create certain liens, (ii) enter into sale/leaseback transactions and (iii) enter into mergers or consolidations. These covenants are subject to a number of important qualifications and exceptions contained in the Indenture.
Events of default under the Indenture include, among others, the following (subject in certain cases to grace and cure periods): nonpayment, breach of covenants in the Indenture, default of payment of principal at final maturity and cessation of the guarantees.
The foregoing description is not complete and is qualified in its entirety by reference to the complete text of the Underwriting Agreement, attached as Exhibit 1.1 hereto, and the Indenture, attached as Exhibits 4.1 and 4.2 hereto.
The underwriters, and their affiliates have in the past provided and from time to time in the future may provide the Company and its affiliates with certain commercial banking, financial advisory, investment banking and other services in the ordinary course of business, for which they have received and may receive customary payments of interest, fees and commissions.
