| Item 1.01. | Entry into a Material Definitive Agreement |
On April 20, 2021, NexPoint Real Estate Finance, Inc., a Maryland corporation (the “Company”) completed its offering of its 5.75% senior unsecured notes due 2026 (the “Notes”). The Company issued the Notes pursuant to its Indenture, dated April 13, 2021 (the “Base Indenture”), between the Company and UMB Bank, National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated April 20, 2021, between the Company and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).
The Indenture provides, among other things, that the Notes will be senior unsecured obligations of the Company. Interest is payable on the Notes on May 1 and November 1 of each year, beginning on November 1, 2021, and the Notes will mature on May 1, 2026.
Prior to February 1, 2026, the Company may at its option redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes plus the make-whole premium, if any, as of, and accrued and unpaid interest to, but not including, the redemption date. On or after February 1, 2026, the Company may at its option redeem the Notes, at any time, in whole or in part, on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date.
Subject to certain limitations, in the event of a change of control of the Company, the Company will be required to make an offer to repurchase the Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the purchase date.
The Indenture contains restrictive covenants that, among other things, require the Company to maintain certain financial ratios and limit the ability of the Company to incur additional indebtedness. The foregoing limitations are subject to exceptions as set forth in the Supplemental Indenture.
The Indenture provides for customary events of default that include, among other things (subject in certain cases to customary grace and cure periods): (i) non-payment of principal or interest, (ii) breach of certain covenants contained in the Indenture or the Notes, (iii) an event of default or acceleration of certain other indebtedness of the Company or a subsidiary in which the Company has invested at least $75 million in capital within the applicable grace period and (iv) certain events of bankruptcy or insolvency. Generally, if an event of default occurs (subject to certain exceptions), the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all of the Notes to be due and payable.
The Base Indenture is filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 13, 2021 and is incorporated herein by reference. The Supplemental Indenture is filed as Exhibit 4.1 hereto, and is incorporated herein by reference. The above description of the material terms of the Indenture is not complete and is qualified in its entirety by reference to the Base Indenture and the Supplemental Indenture.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information relating to the Notes and the Indenture contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
On April 20, 2021, the Company issued a press release announcing the closing of the Notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
