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): November 19, 2019
Black Creek Industrial REIT IV Inc.
(Exact name of registrant as specified in its charter)
Maryland | | 000-56032 | | 47-1592886 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (IRS Employer
Identification No.) |
518 Seventeenth Street, 17th Floor
Denver, CO 80202
(Address of principal executive offices)
(303) 228-2200
(Registrant’s telephone number, including area code)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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: None
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 x
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. x
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
On November 19, 2019, BCI IV Operating Partnership LP (the “Borrower”), a wholly-owned subsidiary of Black Creek Industrial REIT IV Inc. (the “Company”), entered into a second amended and restated credit facility agreement (the “Credit Facility Agreement”). The lenders providing commitments pursuant to the Credit Facility Agreement are Wells Fargo Bank, National Association, as Administrative Agent and as a lender, Bank of America, N.A., as Syndication Agent and as a lender, U.S. Bank National Association, as a Revolving Credit Facility Joint Lead Arranger and Documentation Agent and as a lender, JPMorgan Chase Bank, N.A., as Existing Term Facility Documentation Agent and as a lender and Regions Bank, as Incremental Term Facility Documentation Agent and as a lender (collectively, the “Lenders”). In addition, Wells Fargo Securities, LLC serves as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner and BofA Securities, Inc. serves as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner pursuant to the Credit Facility Agreement. The Credit Facility Agreement amends and restates in its entirety that certain credit agreement dated as of February 21, 2019, as amended, among the Company, the Borrower, and certain of the Lenders (the “Prior Credit Facility Agreement”).
The Credit Facility Agreement revised certain of the terms of the Prior Credit Facility Agreement, pursuant to which there is a revolving loan commitment of $300.0 million (the “Revolving Credit Facility”), including, among other changes: (i) increase the available term loan facility from $200.0 million to $400.0 million (the “Term Facility,” and together with the Revolving Credit Facility, the “Credit Facility”), which consists of the $200.0 million existing term loan facility that was established under the Prior Credit Facility Agreement and has been fully advanced to the Company and a new $200.0 million incremental term loan facility (the “Incremental Term Commitment”) of which $100.0 million has been advanced to the Company; and (ii) increase the size of the accordion feature to allow the Company to further increase the maximum borrowing capacity to $1.0 billion from $600.0 million, subject to meeting certain criteria.
Any increase to the size of the Credit Facility may be in the form of an increase in the aggregate revolving loan commitments, the aggregate term loan commitments, or a combination of both. The maturity date of the Revolving Credit Facility is November 19, 2023 and may be extended pursuant to a one-year extension option, subject to the Borrower’s continuing compliance with certain financial covenants, the payment of an extension fee and the satisfaction of other customary conditions. The maturity date of the Term Facility is February 21, 2024.
At the Borrower’s election, borrowings under the Credit Facility will be charged interest based on (i) LIBOR plus a margin ranging from 1.30% to 2.10% with respect to the Revolving Credit Facility and 1.25% to 2.05% with respect to the Term Facility, or (ii) an alternate base rate plus a margin of 0.30% to 1.10% with respect to the Revolving Credit Facility and 0.25% to 1.05% with respect to the Term Facility. In each case, the applicable margin will vary depending on the Company’s consolidated leverage ratio. The borrowings under the Credit Facility will be charged interest as described above, unless and until a replacement rate is determined and implemented in the event LIBOR is not available in connection with the expected discontinuation of LIBOR or otherwise, in accordance with the terms set forth in the Credit Facility Agreement.
The alternate base rate is equal to the greatest of (a) the prime rate announced from time to time by Wells Fargo Bank, National Association, (b) the Federal Funds Effective Rate plus 0.5%, and (c) LIBOR plus 1.0%. If either of the primary rate or the alternative base rate is less than zero, it will be deemed to be zero for purposes of the Credit Facility.
In addition to interest, the Borrower must pay: (i) a quarterly unused fee that equals the amount of the revolving loan commitment unused by the Borrower on a given day multiplied by either (a) 0.15% on an annualized basis if more than 50% of the revolving loan commitment is being used or, (b) 0.20% on an annualized basis if 50% or less of the revolving loan commitment is being used; and (ii) a ticking fee that equals the amount of the Incremental Term Commitment undrawn by the Borrower on a given day multiplied by 0.20% on an annualized basis. If applicable, the ticking fee will accrue on the undrawn portion beginning with the period from January 19, 2020 through a date not later than May 16, 2020. The Borrower is also required to pay certain participation and other fees in connection with any letters of credit issued under the Credit Facility.
Borrowings under the Credit Facility will be available for general business purposes, including but not limited to debt refinancing, property acquisitions, new construction, renovations, expansions, tenant improvement, refinancing of existing lines, financing acquisitions of permitted investments, and closing costs and equity investments primarily associated with commercial real estate
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property acquisitions or refinancings. Borrowings under the Credit Facility will be guaranteed by the Company and certain of its subsidiaries. As of November 19, 2019, $331.0 million was outstanding under the Credit Facility.
The Credit Facility Agreement requires the maintenance of certain financial and borrowing base covenants including covenants concerning: (i) consolidated tangible net worth; (ii) consolidated fixed charge coverage ratio; (iii) consolidated leverage ratio; (iv) secured indebtedness; (v) secured recourse indebtedness; (vi) minimum total asset value (cannot be less than $500.0 million); (vii) unencumbered interest coverage ratio; (viii) unencumbered property pool leverage ratio; and (ix) certain other unencumbered property pool criteria.
In addition, the Credit Facility Agreement contains customary affirmative and negative covenants which, among other things, require the Borrower to deliver to the Lenders specified quarterly and annual financial information, and limit the Borrower and/or its subsidiaries, subject to various exceptions and thresholds from: (i) creating liens (other than certain permitted liens) on the unencumbered property pool; (ii) merging with other companies or changing ownership interest; (iii) selling all or substantially all of its assets or properties; (iv) permitting certain transfers of a material interest in the Borrower; (v) entering into transactions with affiliates, except on an arms-length basis; (vi) making certain types of investments; (vii) if in default under the Credit Facility Agreement, paying certain distributions or certain other payments to affiliates; and (viii) incurring indebtedness (subject to certain permitted indebtedness).
The Credit Facility Agreement permits voluntary prepayment of principal and accrued interest without premium or penalty and contains various customary events of default, which are described therein. As is customary in such financings, if an event of default occurs under the Credit Facility Agreement, the Lenders may accelerate the repayment of amounts outstanding under the Credit Facility and exercise other remedies subject, in certain instances, to the expiration of an applicable cure period.
The preceding summary does not purport to be a complete summary of the Credit Facility and is qualified in its entirety by reference to the Credit Facility Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number | | Description |
10.1 | | Second Amended and Restated Credit Agreement, dated as of November 19, 2019, by and among BCI IV Operating Partnership LP, as the Borrower; the lenders from time to time who are parties thereto; Wells Fargo Bank, National Association, as Administrative Agent; Bank of America, N.A., as Syndication Agent; U.S. Bank, National Association, as Revolving Credit Facility Documentation Agent; JPMorgan Chase Bank, N.A., as Existing Term Facility Documentation Agent; Regions Bank, as Incremental Term Facility Documentation Agent; Wells Fargo Securities, LLC, as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner; BofA Securities, Inc., as a Revolving Credit Facility Joint Lead Arranger and Joint Bookrunner and a Term Facility Joint Lead Arranger and Joint Bookrunner; and U.S. Bank, National Association, as a Revolving Credit Facility Joint Lead Arranger. |
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements (such as those concerning the amounts available to the Company under the Credit Facility and the Company’s ability to extend the maturity date of the Revolving Credit Facility) that are based on the Company’s current expectations, plans, estimates, assumptions, and beliefs that involve numerous risks and uncertainties, including, without limitation, risks associated with the Company’s ability to continue to maintain its covenants under the Credit Facility Agreement and meet other requirements under the Credit Facility Agreement, and those risks set forth in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Although these forward-looking statements reflect management’s belief as to future events, actual events or the Company’s investments and results of operations could differ materially from those expressed or implied in these forward-looking statements. To the extent that the Company’s assumptions differ from actual results, the Company’s ability to meet such forward-looking statements may be significantly hindered. You are cautioned not to place undue reliance on any forward-looking statements. The Company cannot assure you that it will attain its investment objectives.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BLACK CREEK INDUSTRIAL REIT IV INC. |
| | |
November 22, 2019 | By: | /s/ THOMAS G. MCGONAGLE |
| | Name: | Thomas G. McGonagle |
| | Title: | Managing Director, Chief Financial Officer |
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