Item 1.01 | Entry into a Material Definitive Agreement. |
Unsecured Credit Facility
On October 18, 2019, QualityTech, LP (the "Operating Partnership"), the operating partnership of QTS Realty Trust, Inc. (the "Company"), entered into an unsecured Seventh Amended and Restated Credit Agreement (the "Amended and Restated Agreement") with KeyBank National Association, as agent, the lenders party thereto, KeyBanc Capital Markets, Inc., BofA Securities, Inc., Regions Capital Markets and TD Securities (USA) LLC, as joint lead arrangers and joint bookrunners with respect to the Revolving Credit Loans, Term Loans A and Term Loans B, KeyBanc Capital Markets, Inc., Regions Capital Markets, SunTrust Robinson Humphrey, Inc. and TD Securities (USA) LLC as joint lead arrangers and joint bookrunners with respect to the Term Loans C, and Bank of America, N.A., Regions Bank and TD Securities (USA) LLC, as co-syndication agents, and SunTrust Bank, as co-syndication agent with respect to Term Loans C. The Amended and Restated Agreement amended and restated the Sixth Amended and Restated Credit Agreement dated as of November 30, 2018 by and among the Operating Partnership, KeyBank National Association, as agent, the lenders party thereto, KeyBanc Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Regions Capital Markets and TD Securities (USA) LLC, as joint lead arrangers and joint bookrunners, and Bank of America, N.A., Regions Bank and TD Securities (USA) LLC, as co-syndication agents. The Amended and Restated Agreement is guaranteed by substantially all of the Operating Partnership's subsidiaries.
The Amended and Restated Agreement provides for a term loan of $225 million, maturing on December 17, 2024 ("Term Loan A"), a term loan of $225 million, maturing on April 27, 2025 ("Term Loan B"), an additional term loan of $250 million, maturing on October 18, 2026 ("Term Loan C"), and a revolving credit facility of $1 billion, including a foreign currency commitment of up to $300 million, maturing on December 17, 2023, with the option to extend until December 17, 2024, subject to satisfaction of certain conditions (collectively, the "Unsecured Credit Facility"). The Unsecured Credit Facility may be increased to up to $2.20 billion, subject to certain conditions, including the consent of the agent and obtaining necessary commitments. The lenders under the Unsecured Credit Facility may issue up to $50 million in letters of credit subject to the satisfaction of certain conditions. As of October 18, 2019, the term loans were fully funded and $276.8 million was outstanding under the revolving credit facility.
The availability under the revolving credit facility is the lesser of (i) $1 billion, (ii) 60% of the unencumbered asset pool capitalized value (or 65% of the unencumbered asset pool capitalized value for one or more periods of up to four consecutive fiscal quarters immediately following a material acquisition for which the Operating Partnership has provided written notice to the Agent) and (iii) the amount resulting in an unencumbered asset pool debt yield of 10.5%. In the case of clauses (ii) and (iii) of the preceding sentence, the amount available under the revolving credit facility is adjusted to take into account any other unsecured debt and certain capitalized leases. A material acquisition is an acquisition of properties or assets with a gross purchase price equal to or in excess of 15% of the Operating Partnership's gross asset value (as defined in the Amended and Restated Agreement) as of the end of the most recently ended quarter for which financial statements are publicly available. The capitalization rate used for determining gross asset values for data center properties that are owned or ground leased was reduced to 7.50% from 7.75%.
Amounts outstanding under the Amended and Restated Agreement bear interest at a variable rate equal to, at the Operating Partnership's election, LIBOR or a base rate, plus a spread that will vary depending upon the Company's leverage ratio. For revolving credit loans, the spread ranges from 1.25% to 1.85% for LIBOR loans and 0.25% to 0.85% for base rate loans. For Term Loans A and Term Loans B, the spread ranges from 1.20% to 1.80% for LIBOR loans and 0.20% to 0.80% for base rate loans. These spreads represent a 10 basis point reduction from the spreads in the Company's credit facility prior to the amendment. For Term Loans C, the spread ranges from 1.50% to 1.85% for LIBOR loans and 0.50% to 0.85% for base rate loans.
As of October 18, 2019, the weighted average interest rate for amounts outstanding under the Amended and Restated Agreement was 3.26% for revolving credit loans and 3.34% for term loans.
