| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 14, 2023, PR Cherry Hill STW LLC and Cherry Hill Center, LLC, both of which are subsidiaries of Pennsylvania Real Estate Investment Trust (the “Trust”) that own Cherry Hill Mall (the “Borrowers”), PREIT Associates, L.P., which is the guarantor under the Notes (as defined below) and New York Life Insurance Company and Teachers Insurance and Annuity Association of America, which are the lenders under the loans that are evidenced by the Notes (the “Lenders”), entered into a Loan Extension, Modification and Commitment to Restate Agreement (the “Extension, Modification and Commitment to Restate Agreement”) in connection to that certain (i) $150.0 million promissory note with New York Life Insurance Company dated August 15, 2012, and (ii) $150.0 million promissory note with Teachers Insurance and Annuity Association of America dated August 15, 2012 (each individually, a “Note” and together, the “Notes”). The Extension, Modification and Commitment to Restate Agreement extended the maturity date of the Notes to February 15, 2024. To satisfy the conditions precedent of the Extension, Modification and Commitment to Restate Agreement and effectuate the extension of the Maturity Date of the Notes, the Borrowers paid an extension fee to the Lenders calculated by multiplying 0.35% by the outstanding principal balance of each Note and paid certain expenses incurred by the Lenders in connection with the Extension, Modification and Commitment to Restate Agreement, among other terms and conditions. Additionally, the Borrowers are party to certain other agreements that were amended in accordance with the Extension, Modification and Commitment to Restate Agreement.
The Extension, Modification and Commitment to Restate Agreement also provided for a commitment to restate the loans that are evidenced by the Notes pursuant to an amendment and restatement of each Note, effective as of February 15, 2024, on the same terms as each existing Note, except as follows: (i) the maturity date will be the earlier of (a) February 15, 2025 and (b) the initial Failed Milestone Date, if any; (ii) the interest rate will be a rate that is the greater of (a) a fixed rate equivalent to 2.75% in excess of the then 2-Year US Treasury Rate and (b) 7.25% per annum; (iii) each Note will require a monthly payment of principal and interest based upon the new interest rate, an assumed principal balance of $114,453,252.00 and a continuation of the existing 30 year amortization schedule; and (iv) there will be successive extension options thereafter to February 15, 2026, August 15, 2026, February 15, 2027 and August 15, 2027, each extension subject to the terms and conditions set forth under the Extension, Modification and Commitment to Restate Agreement (the “Commitment”). The Lenders’ obligations under the Commitment are subject to (i) the payment by the Borrowers of an additional $7.5 million of the outstanding principal balance of each Note ($15.0 in the aggregate with respect to both Notes) and (ii) the Bankruptcy Court entering a final order approving a DIP Facility by February 12, 2024, among other terms and conditions.
All capitalized terms used in this Current Report on Form 8-K and not otherwise defined herein have the meanings ascribed to such terms in the Extension, Modification and Commitment to Restate Agreement. The description above is qualified in its entirety by reference to the full text of the Extension, Modification and Commitment to Restate Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
