| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 25, 2022, Four Corners Property Trust, Inc. (the “Company”) and its subsidiary, Four Corners Operating Partnership, LP (the “Borrower”), entered into a Third Amended and Restated Revolving Credit and Term Loan Agreement (the “Loan Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”), and the lenders (the “Lenders”) and other agents party thereto, which amends and restates in its entirety an existing Second Amended and Restated Revolving Credit and Term Loan Agreement dated as of June 4, 2021 by and among the Company, the Borrower, the Agent, the Lenders and the other agents party thereto.
The Loan Agreement provides for a revolving credit facility in an aggregate principal amount of $250.0 million (the “Revolving Credit Facility”) and a term loan facility in an aggregate principal amount of $430.0 million, comprised of (i) a $150.0 million term credit facility with a maturity date of November 9, 2025 (the “Term Loan A-1 Facility”), (ii) a $100.0 million term credit facility with a maturity date of November 9, 2026 (the “Term Loan A-2 Facility”), (iii) a $90.0 million term credit facility with a maturity date of January 9, 2027 (the “Term Loan A-3 Facility”) and (iv) a $90.0 million term credit facility with a maturity date of January 9, 2028 (the “Term Loan A-4 Facility” and collectively with the Term Loan A-1 Facility, Term Loan A-2 Facility, and the Term Loan A-3 Facility, the “term loan facility” and each a “term loan”). The Loan Agreement has an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $350.0 million, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount.
Loans under the Loan Agreement accrue interest at a per annum rate equal to, at the Borrower’s election, either a term SOFR-based or daily simple SOFR floating interest rate plus an applicable margin of 0.725% to 1.40% plus a credit spread adjustment of 0.10%, in the case of the revolving credit facility, 0.80% to 1.65% plus a credit spread adjustment of 0.10%, in the case of the Term Loan A-1 Facility and Term Loan A-2 Facility, and 0.80% to 1.60% plus a credit spread adjustment of 0.10%, in the case of the Term Loan A-3 Facility and Term Loan A-4 Facility, or a base rate determined according to a prime rate or federal funds rate plus a margin of 0.00% to 0.40%, in the case of the revolving credit facility, 0.00% to 0.65%, in the case of the Term Loan A-1 Facility and Term Loan A-2 Facility, and 0.00% to 0.60%, in the case of the Term Loan A-3 Facility and Term Loan A-4 Facility. In each case, the margin is determined according to the credit rating applicable from time to time with respect to the Company’s senior, unsecured, long-term indebtedness. In the event that all or a portion of the principal amount of any loan borrowed pursuant to the Loan Agreement is not paid when due, interest will accrue at the rate that would otherwise be applicable thereto plus 2.00%. The Borrower is required to pay a facility fee at a rate of 0.125% to 0.30%, per annum, depending on the Company’s credit rating applicable from time to time with respect to such indebtedness, applies to the total revolving commitments outstanding.
Amounts owing under the Loan Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a SOFR-based rate election is in effect. The revolving credit facility matures on November 9, 2025, and the term loan facility matures as described above. No amortization payments are required on any term loan prior to its maturity date. The Borrower has the option to extend the maturity date of the revolving credit facility once by an additional six months, subject to the payment of an extension fee of 0.0625% on the aggregate amount of the then-outstanding revolving commitments for such extension.
The obligations under the Loan Agreement are unsecured. Pursuant to a third amended and restated parent guaranty entered into on October 25, 2022, which amends and restates in its entirety the second amended and restated parent guaranty dated June 4, 2021, the obligations under the Loan Agreement are guaranteed, on a joint and several basis, by the Company and its subsidiary, Four Corners GP, LLC (the “Guaranty”).
The Loan Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, contain obligations to maintain REIT status, and restrict, subject to certain exceptions, incurrence of secured debt, the ability of the Borrower and the guarantors to enter into mergers, consolidations, sales of assets and similar transactions, limitations on distributions and other restricted payments, and limitations on transactions with affiliates. In addition, the Borrower will be subject to the following financial covenants: (1) total leverage ratio not to exceed 60%, (2) mortgage-secured leverage ratio not to exceed 40%, (3) minimum fixed charge coverage ratio of 1.50 to 1.00, (4) maximum unencumbered leverage ratio not to exceed 60% and (5) minimum unencumbered interest coverage ratio not less than 1.75 to 1.00.
