| Item 1.01. | Entry into a Material Definitive Agreement. |
As previously announced, on December 7, 2018, Extra Space Storage LP (the “Operating Partnership”), the operating partnership subsidiary of Extra Space Storage Inc. (the “Company”), entered into an amended and restated credit agreement (the “Original Credit Agreement”) with (i) certain lenders named therein, (ii) U.S. Bank National Association, as administrative agent, (iii) the followingco-syndication agents: Wells Fargo Bank, National Association, and Bank of America, N.A., solely with respect to the Revolving Credit Facility and the Tranche 1 Term Loan Facility (each as defined below), and PNC Bank, National Association, solely with respect to the Tranche 2 Term Loan Facility (as defined below), (iv) the followingco-documentation agents: TD Bank, PNC Bank, National Association, JPMorgan Chase Bank, N.A., BMO Harris Bank N.A., Bank of the West, Citibank, N.A., Compass Bank and Regions Bank, solely with respect to the Revolving Credit Facility and the Tranche 1 Term Loan Facility, and (v) the following joint lead arrangers and joint book runners: U.S. Bank National Association, Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, solely with respect to the Revolving Credit Facility and the Tranche 1 Term Loan Facility, and PNC Capital Markets LLC, solely with respect to the Tranche 2 Term Loan Facility. The Company joined in the Original Credit Agreement for certain limited purposes as set forth therein.
On July 1, 2019, the Operating Partnership entered into Amendment No. 1 to Amended and Restated Credit Agreement (“Amendment No. 1” and, together with the Original Credit Agreement, the “Credit Agreement”) with (i) certain lenders named therein and (ii) U.S. Bank National Association, as administrative agent, whereby the Operating Partnership exercised an accordion option under the Original Credit Agreement to increase the amount of the commitments available thereunder by an additional $500.0 million.
The Credit Agreement, as amended, provides for aggregate borrowings of up to $1.85 billion, consisting of a senior unsecured revolving credit facility of $650.0 million, due January 31, 2023 (the “Revolving Credit Facility”), a senior unsecured term loan of up to $480.0 million, due January 31, 2024 (the “Tranche 1 Term Loan Facility”), a senior unsecured term loan of up to $220.0 million, due October 13, 2023 (the “Tranche 2 Term Loan Facility”), an unsecured term loan of $245.0 million, due January 30, 2025 (the “Tranche 3 Term Loan Facility”) and a senior unsecured term loan of $255.0 million, due June 29, 2026 (the “Tranche 4 Term Loan Facility” and, together with the Revolving Credit Facility, the Tranche 1 Term Loan Facility, the Tranche 2 Term Loan Facility and the Tranche 3 Term Loan Facility, the “Credit Facility”). On July 1, 2019, the Tranche 3 Term Loan Facility and the Tranche 4 Term Loan Facility were both fully funded to the Operating Partnership. The Operating Partnership may increase the amount of the commitments under the Credit Facility up to an aggregate of $2.0 billion, and extend the term of the Revolving Credit Facility for up to two additional periods of six months each, after satisfying certain conditions.
Amounts outstanding under the Credit Agreement will bear interest at floating rates, at the Operating Partnership’s option, equal to either (i) LIBOR plus the applicable Eurodollar rate margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.00%, (b) the federal funds rate plus 0.50%, (c) U.S. Bank’s prime rate or (d) the Eurodollar rate plus 1.00%. The applicable Eurodollar rate margin will range from 1.050% to 2.200% per annum and the applicable base rate margin will range from 0.050% to 1.200% per annum, in each case depending on the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement, and the type of loan. If the Operating Partnership obtains a specified investment grade rating from two or more specified credit rating agencies, and elects to use the alternative rates based on the Operating Partnership’s debt rating, the applicable Eurodollar rate margin will range from 0.750% to 2.250% per annum and the applicable base rate margin will range from 0.00% to 1.250% per annum, in each case depending on the rating achieved and the type of loan.
The Operating Partnership may voluntarily prepay loans under the Credit Agreement in whole or in part at any time, subject to certain notice requirements and, with respect to the Tranche 4 Term Loan Facility, certain prepayment penalties. All other material terms of the Credit Agreement remain the same and govern the Tranche 3 Term Loan Facility and the Tranche 4 Term Loan Facility, as applicable.
An affiliate of Wells Fargo Securities, LLC is a lender under the Operating Partnership’s outstanding secured line of credit. In addition, Wells Fargo Securities, LLC and affiliates of Bank of America, N.A., Bank of the West, BMO Harris Bank, N.A., Branch Banking and Trust Company, JPMorgan Chase Bank, N.A., Regions Bank, PNC Bank, National Association and TD Bank act as sales agents
