| Item 1.01 | Entry into a Material Definitive Agreement |
On April 12, 2024, Brandywine Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), completed its offering and sale (the “Notes Offering”) of $400 million in aggregate principal amount of its 8.875% Guaranteed Notes due 2029 (the “Notes”). The Notes Offering was made pursuant to the Operating Partnership’s shelf registration statement on Form
S-3
(File
No. 333-270133)
filed with the Securities and Exchange Commission (the “Commission”) on February 28, 2023. The material terms of the Notes are described in the base prospectus dated February 28, 2023, as supplemented by a final prospectus supplement dated April 3, 2024.
The Notes were issued under the Indenture, dated as of October 22, 2004 (the “Original Indenture,” and, as modified or supplemented from time to time, the “Indenture”), as supplemented by the First Supplemental Indenture dated as of May 25, 2005 (the “First Supplemental Indenture”), and the Third Supplemental Indenture dated as of April 5, 2011 (the “Third Supplemental Indenture”), among Brandywine Realty Trust, a Maryland real estate investment trust (the “Company”), the Operating Partnership and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee.
The Notes bear interest at a rate of 8.875% per year. Interest is payable on the Notes semi-annually on April 12 and October 12 of each year, beginning on October 12, 2024.
The Notes are unsecured obligations of the Operating Partnership and will rank equally with all of its other unsecured unsubordinated indebtedness from time to time outstanding. The Notes will be effectively subordinated to the indebtedness and other liabilities of the consolidated subsidiaries of the Operating Partnership. The Company, which is the sole general partner of the Operating Partnership, has fully and unconditionally guaranteed payment of principal and interest on the Notes.
Prior to March 12, 2029 (one month prior to the Notes’ maturity date) (the “Par Call Date”), the Operating Partnership may redeem the Notes at its option, in whole or in part, at any time and from time to time, at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes matured on the Par Call Date) on a semi-annual basis (assuming a
360-day
year consisting of twelve
30-day
months) at the Treasury Rate plus 50 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the Notes to be redeemed, plus in either case, accrued and unpaid interest thereon to the redemption date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.
If certain events of default specified in the Indenture occur and are continuing with respect to a series of the Notes, the Trustee or the holders of not less than 25% in outstanding principal amount of a series of the Notes may declare the principal of and premium, if any, and accrued and unpaid interest on the Notes to be due and payable immediately by written notice thereof to the Operating Partnership and the Company (and to the Trustee if given by the holders).
The net proceeds from the Notes Offering amounted to approximately $391.8 million after deducting the
underwriting
discount and estimated transaction expenses relating to the Notes Offering and payable by the Operating Partnership and excluding accrued interest paid by the purchasers of the Notes. The Operating Partnership will use the net proceeds from the Notes Offering to repurchase or redeem the $335.1 million outstanding principal amount of the Operating Partnership’s 4.10% Guaranteed Notes due October 1, 2024 and for general corporate purposes, which may include the repayment, repurchase or other retirement of other indebtedness.
Affiliates of certain of the Underwriters, and the trustee under the indenture for the notes, are lenders and/or agents under the unsecured revolving credit facility. To the extent that the net proceeds from the offering are used to repay amounts that have been borrowed, may borrow or
re-borrow
in the future under the unsecured revolving credit facility and term loan facility, those lenders will receive a pro rata portion of any of the proceeds from this offering that are used to repay any such amounts.
The foregoing is a summary of the material terms and conditions of the Indenture and is not a complete discussion. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Original Indenture, the First Supplemental Indenture, the Third Supplemental Indenture, and the Notes. The Original Indenture previously was filed with the Commission on October 22, 2004, as Exhibit 4.1 to the Company’s Current Report on Form
8-K,
and is incorporated into this Item 1.01 by this reference. The First Supplemental Indenture previously was filed with the Commission on May 26, 2005, as Exhibit 4.1 to the Company’s Current Report on Form
8-K,
and is incorporated into this Item 1.01 by this reference. The Third Supplemental Indenture previously was filed with the Commission on April 5, 2011, as Exhibit 4.1 to the Company’s Current Report on Form
8-K,
and is incorporated into this Item 1.01 by this reference. A form of Note is included in Exhibit 4.1, to this Current Report on Form
8-K
and are incorporated into this Item 1.01 by this reference.
