Item 1.01 Entry Into a Material Definitive Agreement.
On June 4, 2021, Welltower Inc. (the “Company”) entered into a Credit Agreement (the “New Credit Agreement”) with a consortium of 34 banks; KeyBank National Association, as administrative agent and L/C issuer; BofA Securities, Inc. and JPMorgan Chase Bank, N.A., as joint book runners; BofA Securities, Inc., JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and Wells Fargo Securities LLC, as U.S. joint lead arrangers; BofA Securities, Inc., JPMorgan Chase Bank, N.A., KeyBanc Capital Markets Inc. and RBC Capital Markets, as Canadian joint lead arrangers; Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents; Wells Fargo Bank, N.A., MUFG Bank, Ltd., Barclays Bank PLC, Citibank, N.A., Credit Agricole Corporate and Investment Bank, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Mizuho Bank, Ltd., Morgan Stanley Bank, N.A., PNC Bank, National Association and Royal Bank of Canada, as co-documentation agents; BNP Paribas, Capital One, National Association, Citizens Bank, N.A., Fifth Third Bank, National Association, The Huntington National Bank, Regions Bank, The Bank of Nova Scotia, Sumitomo Mitsui Banking Corporation, TD Bank, NA, Truist Bank and Bank of Montreal, as co-senior managing agents and Credit Agricole Corporate and Investment Bank, as sustainability structuring agent. The New Credit Agreement consists of a $4,000,000,000 unsecured revolving credit facility (the “Revolving Facility”), comprised of a $3,000,000,000 tranche (the “Revolving A Tranche”) and a $1,000,000,000 tranche (the “Revolving B Tranche”), a $500,000,000 unsecured term loan facility that was originally issued under the Prior Credit Agreement (as defined below) (the “USD Term Facility”) and a CAD 250,000,000 unsecured term loan facility that was originally issued under the Prior Credit Agreement (the “CAD Term Facility”), and replaces the Company’s existing $3,000,000,000 unsecured revolving credit facility, $500,000,000 unsecured term loan facility and CAD 250,000,000 unsecured term loan facility.
The maturity date for the Revolving A Tranche is June 4, 2025, the maturity date for the Revolving B Tranche is June 4, 2023 and the maturity date for each of the USD Term Facility and the CAD Term Facility is July 19, 2023; provided, that, the maturity date of the Revolving A Tranche and/or the Revolving B Tranche may be extended for two successive terms of six months each if no event of default has occurred under the New Credit Agreement and the Company pays a non-refundable extension fee of 0.0625% of the applicable tranche of the Revolving Facility then in effect. Based on the satisfaction of certain conditions, the Company has the right to increase the amount available under the credit facilities up to an additional $1,250,000,000 for the Revolving Facility and the USD Term Facility, in the aggregate, and CAD 250,000,000 for the CAD Term Facility. The lenders would have the right, but not the obligation, to commit to all or a portion of any such increase.
The New Credit Agreement includes sublimits of (a) up to $100,000,000 for letters of credit, (b) up to 50% of the Revolving Facility commitment amount for certain negotiated rate loans, and (c) up to $1,000,000,000 for borrowings (including letters of credit) under certain alternative currencies; each of these sublimits are part of, and not in addition to, the amounts available under the Revolving Facility.
Revolving loans and term loans bear interest at the applicable margin plus the base rate or applicable LIBOR/CDOR interest rate, at the Company’s option. Negotiated rate loans bear interest at the rate agreed to between the Company and the applicable lender(s). Letter of credit fees equal the applicable margin for revolving loans multiplied by the daily amount available to be drawn under such letters of credit. The applicable margins are based on the Company’s ratings established by certain debt rating agencies for the Company’s long term, senior, unsecured, non-credit enhanced debt (the “Debt Ratings”). Based on the Company’s current Debt Ratings, the applicable margins are as follows: (a) for a revolving loan under the Revolving Facility, 0.775% for a LIBOR loan or 0.000% for a base rate loan; (b) for a term loan under the USD Term Facility, 0.900% for a LIBOR loan or 0.000% for a base rate loan; (c) for a term loan under the CAD Term Facility, 0.900% for a CDOR loan or 0.000% for a base rate loan and (d) for letter of credit fees, 0.775%. The applicable margin for loans under the Revolving Facility and letter of credit fees are subject to reduction upon the Company meeting certain sustainability metrics as set forth in the New Credit Agreement. The New Credit Agreement includes customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York.
For the Revolving Facility, the Company is obligated to pay an annual facility fee equal to the product of the applicable rate multiplied by the Revolving Facility amount with such rate based on the Company’s Debt Ratings. The current applicable rate for the facility fee for the Revolving Facility is 0.150%. For letters of credit, the Company is obligated to pay a fronting fee of 0.125% on the face amount and subsequent increases of such amounts of such letters of credit and customary fees and standard costs of the issuers of such letters of credit.
The New Credit Agreement includes certain customary representations and warranties by the Company and imposes certain customary covenants on the Company. The New Credit Agreement contains certain customary events of default, and if an event of default occurs and continues, the Company is subject to certain actions by the administrative agent, including, without limitation, the acceleration of repayment of all amounts outstanding under the New Credit Agreement.
