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 in Item 8.01 of this Current Report on Form 8-K under the caption “Borrowings Under Revolving Credit Facility” is incorporated herein by reference.
Item 8.01.Other Events.
Borrowings Under Revolving Credit Facility
As previously disclosed, STORE Capital Corporation (the “Company”) is a party to that certain Amended and Restated Credit Agreement, dated as of February 9, 2018 (as amended, the “Credit Agreement”), by and among the Company, as borrower, and the lenders and agents party thereto, which includes a $600 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) and two $100 million senior unsecured term loans. The material terms of the Revolving Credit Facility and the term loans are described under “Note 4 – Debt” of the Notes to Consolidated Financial Statements of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “Form 10-K”), filed with the Securities and Exchange Commission on February 21, 2020 and incorporated herein by reference, and a copy of the Credit Agreement is filed as an exhibit to the Form 10-K. As of December 31, 2019, the Company had no outstanding borrowings under the Revolving Credit Facility. Through March 16, 2020, the Company had drawn $150 million under the Revolving Credit Facility to fund acquisitions of properties in the ordinary course of business and to increase its cash position and preserve financial flexibility in light of current economic uncertainties in the United States and globally arising from the COVID-19 pandemic.
On March 26, 2020, the Company borrowed an additional $450 million under the Revolving Credit Facility as a further precautionary measure to increase its cash position and preserve financial flexibility in light of the ongoing and continued economic uncertainties in the United States and globally arising from the COVID-19 pandemic. The proceeds of borrowings under the Revolving Credit Facility may be used for general business or other purposes permitted by the Credit Agreement. Based on the Company’s current debt ratings, the initial interest rate for borrowings under the Revolving Credit Facility is LIBOR plus 1.00%, which was 1.92% as of March 26, 2020. As of March 31, 2020, and after giving effect to the foregoing borrowing, the Company had an aggregate of $600 million outstanding under the Revolving Credit Facility and had over $630 million in cash on hand.
Supplemental Risk Factor
The following risk factor supplements the risk factors described under “Item 1A. Risk Factors” in the Form 10-K, and should be read in conjunction with the other risk factors presented in the Form 10-K.
Actual or perceived threats associated with epidemics, pandemics or public health crises could have a material adverse effect on our results of operations and the businesses of our customers.
Epidemics, pandemics or other public health crises, including the recent spread of Coronavirus (“COVID-19”), that impact states where our customers operate their businesses or where our properties are located, and preventative measures taken to alleviate any public health crises, including “shelter-in-place” or “stay-at-home” orders issued by local, state or federal authorities, may have a material adverse effect on our and our customers’ businesses, results of operations, liquidity and ability to access capital markets, and may affect our ability as a net-lease real estate investment trust to acquire properties or lease properties to our customers, who may be unable, as a result of any economic downturn occasioned by public health crises, to make rental payments when due.
The top industries in our portfolio are restaurants, early childhood education centers, health clubs, furniture stores and automotive repair and maintenance services. Our customers in each of these industries, as
