Item 1.01 Entry into a Material Definitive Agreement.
On December 27, 2013, Omega Healthcare Investors, Inc. (“Omega”) entered into a new $200 million senior unsecured, deferred draw, term loan facility (the “2013 Term Loan Facility”). The 2013 Term Loan Facility matures on February 29, 2016.
The 2013 Term Loan Facility is being provided pursuant to a Credit Agreement, dated as of December 27, 2013 (the “2013 Credit Agreement”), among Omega, as borrower, certain of Omega’s subsidiaries identified in the 2013 Credit Agreement, as guarantors, Bank of America, N.A., as the initial lender (together with other lenders from time to time becoming signatory to the 2013 Credit Agreement, as lenders, the “2013 Term Lenders”), and Bank of America, N.A., as administrative agent for the 2013 Term Lenders. Omega’s obligations in connection with the 2013 Term Loan Facility are jointly and severally guaranteed by Omega’s current subsidiaries (other than those designated as “unrestricted subsidiaries”) for the benefit of the administrative agent and the 2013 Term Lenders. Additional subsidiaries created or acquired by Omega in the future (unless designated as unrestricted subsidiaries) will also be required to guarantee Omega’s obligations in connection with the 2013 Term Loan Facility, if such future subsidiaries own unencumbered real property or guarantee other unsecured funded debt (including but not limited to Omega’s unsecured senior notes and Omega’s 2012 senior unsecured revolving credit and term loan facilities).
No borrowings have yet been made by Omega under the 2013 Term Loan Facility. Proceeds of future such borrowings may be used only to finance general corporate working capital (including repayment of existing indebtedness, asset acquisitions, acquiring or improving income producing healthcare facilities, and investments incidental or related to such purposes), capital expenditures or other corporate purposes of Omega and its subsidiaries that guarantee the 2013 Term Loan Facility. Omega currently anticipates drawing on the 2013 Term Loan Facility early in 2014 to repay outstanding borrowings under Omega’s 2012 senior unsecured revolving credit facility.
From time to time, certain of the 2013 Term Lenders, their affiliates and/or their predecessors have provided commercial banking, investment banking and other financial advisory services to Omega or served as underwriters or sales agents for offerings of Omega’s equity or debt, for which they have received customary fees. Such services have included affiliates of certain of the 2013 Term Lenders serving as lenders under Omega’s 2012 senior unsecured revolving credit and term loan facilities. Assuming Omega repays borrowings under Omega’s 2012 senior unsecured revolving credit facility with proceeds from borrowings under the 2013 Term Loan Facility, such lenders would receive a portion of such proceeds. Affiliates of certain of the 2013 Term Lenders have served as sales agents under Omega’s at-the-market Equity Shelf Program. The 2013 Term Lenders and their affiliates may, from time to time in the future, engage in transactions with and perform services for Omega in the ordinary course of business.
The material terms of the 2013 Credit Agreement are as follows:
Term Loan Advances and Repayment. Subject to its satisfaction of customary drawing conditions, Omega has the right to draw under the 2013 Term Loan Facility up to three times until February 28, 2014, or until such earlier date as the 2013 Term Loan Facility has been fully advanced or is terminated (the “Term Loan Commitment Period”). Any undrawn portion of the term loan commitment will terminate upon the expiration of the Term Loan Commitment Period and cease to be available. The principal amount advanced under the 2013 Term Loan Facility does not amortize, and is due and payable in full on February 29, 2016.
