UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2022
CHATHAM LODGING TRUST
(Exact name of Registrant as specified in its charter)
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Maryland | 001-34693 | 27-1200777 |
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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222 Lakeview Avenue, Suite 200 | | |
West Palm Beach, | Florida | 33401 |
(Address of principal executive offices) | | (Zip Code) |
(561) 802-4477
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | | | | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of Each Class | Trading Symbol | Name of Exchange on Which Registered |
Common Shares of Beneficial Interest, $0.01 par value | CLDT | New York Stock Exchange |
6.625% Series A Cumulative Redeemable Preferred Shares | CLDT-PA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b.2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 1.01. Entry into a Material Definitive Agreement.
On October 28, 2022, Chatham Lodging Trust (the “Company”), as parent guarantor, Chatham Lodging LP, as borrower (the “Operating Partnership”), and certain subsidiaries of the Operating Partnership, as guarantors, entered into that certain Second Amendment and Restatement Agreement (the “Credit Agreement Amendment”) to the Company’s Amended and Restated Credit Agreement, dated as of March 8, 2018 (as amended by (i) that certain First Amendment to Amendment to Amended and Restated Credit Agreement, dated as of May 6, 2020, (ii) that certain Second Amendment to Amendment to Amended and Restated Credit Agreement, dated as of July 23, 2020, (iii) that certain Third Amendment to Amended and Restated Credit Agreement and First Amendment to Pledge Agreement, dated as of December 16, 2020, (iv) that certain Fourth Amendment to Amendment to Amended and Restated Credit Agreement and Second Amendment to Pledge Agreement, dated as of October 26, 2021, (v) that certain Fifth Amendment to Amendment to Amended and Restated Credit Agreement, dated as of November 8, 2021 and (vi) that certain Sixth Amendment to Amendment to Amended and Restated Credit Agreement and Third Amendment to Pledge Agreement, dated as of May 3, 2022, and as further amended, supplemented, restated or otherwise modified from time to time, the “Existing Credit Agreement”), with certain lenders (each, a “Lender Party” and collectively, the “Lender Parties”), for whom Barclays Bank PLC (“Barclays”) is acting as the administrative agent, and certain other lenders named therein. Barclays, Capital One, N.A., Regions Capital Markets and Wells Fargo Bank National Association acted as joint lead arrangers and joint bookrunners for the revolving credit facility with Bank of America N.A. also participating as a lender.
On October 28, 2022, the Company, as parent guarantor, the Operating Partnership, as borrower, and certain subsidiaries of the Operating Partnership, as guarantors simultaneously entered into that certain Term Loan Credit Agreement (the “Term Loan Agreement”) with Regions and Capital One acting as joint lead arrangers and bookrunners for the term loan Stifel Bank and Trust also participating as a lender.
The Credit Agreement Amendment provides for a $215 million unsecured revolving credit facility and the Term Loan Agreement provides for a $90 million unsecured term loan facility for a total of $305 million to replace the previous $250 million credit facility. The Company has up to six (6) months to borrow funds under the unsecured term loan and intends to fully draw the $90 million within that period to repay secured debt. Inclusive of extension options, both facilities will mature on October 28, 2027.
Pursuant to the Credit Agreement Amendment and the Term Loan Agreement, the Company and certain subsidiaries of the Company guarantee to the lenders thereunder all of the financial obligations (including indebtedness, capital leases and guarantees) of the Operating Partnership and each other guarantor. From time to time, the Operating Partnership may be required to cause additional subsidiaries to become guarantors under the Credit Agreement Amendment and the Term Loan Agreement.
All borrowings under the unsecured revolving credit facility will bear interest at a rate per annum pursuant to a leveraged based pricing grid over the applicable adjusted term Secured Overnight Financing Rate (“SOFR”) ranging from 1.5% to 2.25%. All borrowings under the term loan facility will bear interest at a rate per annum pursuant to a leveraged based pricing grid over the applicable adjusted term SOFR ranging from 1.45% to 2.2%.
The Credit Agreement Amendment and the Term Loan Agreement contain representations, warranties, covenants, terms and conditions customary for transactions of this type, including limitations on liens, incurrence of debt, investments, mergers and asset dispositions, covenants to preserve corporate existence and comply with laws, covenants on the use of proceeds of the credit facility or default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, cross-defaults and guarantor defaults. The occurrence of an event of default under the Credit Agreement Amendment could result in all loans and other obligations becoming immediately due and payable and the credit facility being terminated and allow the lenders under the agreement to exercise all rights and remedies available to them with respect to the collateral.
The foregoing summaries of the material provisions of the Credit Agreement Amendment and the Term Loan Agreement are not complete and are qualified in their entireties by reference to the copy of the Credit Agreement Amendment which is filed as Exhibit 10.1 to this Current Report on Form 8-K and the copy of the Term Loan Agreement which is filed as Exhibit 10.2 to this Current Report on Form 8-K.
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Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the Credit Agreement Amendment, and the Credit Facility and term loans made thereunder, is hereby incorporated by reference into this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On November 1, 2022, the Company issued a press release announcing the Company’s refinancing made in connection with entering into the agreements described under Item 1.01 of this Current Report on Form 8-K. A copy of that press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. | | Description |
| | Second Amendment and Restatement Agreement, dated as of October 28, 2022, among the Operating Partnership, as the borrower, the Registrant, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Barclays Bank, PLC, as administrative agent and L/C issuer, and the other lenders party thereto. |
| | Term Loan Credit Agreement, dated as of October 28, 2022, among the Operating Partnership, as the borrower, the Registrant, as the parent REIT and a guarantor, certain subsidiaries of the borrower, as guarantors, Regions Capital Markets, as administrative agent, and the other lenders party thereto. |
| | Press release regarding refinancing of credit facility, addition of term loan issued November 1, 2022. |
104 | | Cover page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | | | | | | | | | | | | | | |
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| | CHATHAM LODGING TRUST |
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November 1, 2022 | | By: | | /s/ Jeremy B. Wegner |
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| | | | Name: Jeremy B. Wegner |
| | | | Title: Senior Vice President and Chief Financial Officer |