Item 1.01. Entry into a Material Definitive Agreement.
On July 25, 2019, Federal Realty Investment Trust (the “Trust”) entered into an Amended and Restated Credit Agreement (the “Agreement”), by and among the Trust, as Borrower, the financial institutions party thereto and their permitted assignees, as Lenders, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), PNC Bank, National Association, as Syndication Agent, and each of Wells Fargo Securities, LLC and PNC Capital Markets, LLC, as Joint Book Managers.
The Agreement replaces that certain Credit Agreement, dated as of July 7, 2011 (the “Old Agreement”), by and among the Trust, as Borrower, and the financial institutions party thereto. The Old Agreement consisted of an $800.0 million unsecured revolving credit facility (the “Old Facility”) with a maturity date of April 20, 2020. As of June 30, 2019, the Old Facility bore interest at LIBOR plus 82.5 basis points, and the spread over LIBOR was subject to adjustment based on our credit rating.
The Agreement consists of a $1.0 billion unsecured revolving credit facility (the “New Facility”) with a maturity date of January 19, 2024, subject to twosix-month extensions at the option of the Trust. The New Facility initially bears interest at a rate of LIBOR plus 77.5 basis points, and the spread over LIBOR is subject to adjustment based on our credit rating. Under an accordion feature, the Trust has the option to expand the borrowing capacity under the New Facility to up to $1.5 billion.
The Agreement contains a number of restrictions on the Trust’s business, including, but not limited to, restrictions on the Trust’s ability to incur indebtedness, make investments, incur liens, engage in certain affiliate transactions, and engage in major transactions such as mergers. In addition, the Trust is subject to various financial maintenance covenants, including, but not limited to, a minimum fixed charge coverage ratio, a maximum secured indebtedness ratio, and a minimum unencumbered leverage ratio. The Agreement also contains affirmative covenants and events of default, including, but not limited to, a cross default to the Trust’s other indebtedness and the occurrence of a change of control. The Trust’s failure to comply with these covenants, or the occurrence of an event of default, could result in acceleration of the Trust’s debt and other financial obligations under the Agreement. The Old Agreement contained covenants and events of default similar to the foregoing.
Affiliates of certain lenders under the Agreement have served, and may serve in the future, as underwriters in connection with public offerings of equity and debt securities by the Trust, and an affiliate of the Administrative Agent serves as agent and/or principal pursuant to an equity distribution agreement in connection with the Trust’s “at the market” equity program. In addition, affiliates of certain lenders under the Agreement have provided from time to time, and may provide in the future, investment and commercial banking and financial advisory services to the Trust or its affiliates in the ordinary course of business for which they have received and may continue to receive customary fees and commissions.
The foregoing does not constitute a complete summary of the terms and conditions of the Agreement, which is attached hereto as Exhibit 10.1, or of the Old Agreement, which was attached as Exhibit 10.1 to the Trust’s Current Report on Form8-K filed with the Securities and Exchange Commission on July 11, 2011. The description contained herein of the terms and conditions of the Agreement and Old Agreement is qualified in its entirety by reference to the Agreement and Old Agreement, respectively.
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