UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report: October 5, 2021
(Date of earliest event reported)
SUN COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
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| Maryland | 1-12616 | 38-2730780 |
| (State or other jurisdiction of Incorporation) | Commission file number | (I.R.S. Employer Identification No.) |
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| 27777 Franklin Rd. | Suite 200, | Southfield, | Michigan | | 48034 |
| (Address of Principal Executive Offices) | | (Zip Code) |
(248) 208-2500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.01 par value | | SUI | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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| Item 1.01 | Entry into a Material Definitive Agreement. |
The information set forth in Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
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| Item 2.03 | Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On October 5, 2021, Sun Communities Operating Limited Partnership (the “Operating Partnership”), a Michigan limited partnership and subsidiary of Sun Communities, Inc., a Maryland corporation (the “Company”, and, together with the Operating Partnership, the “Obligors”), completed an underwritten public offering (the “Offering”) of $450 million in aggregate principal amount of its 2.300% Senior Notes due 2028 (the “2028 Notes”) and $150 million in aggregate principal amount of its 2.700% Senior Notes due 2031 (the “2031 Notes”, and, together with the 2028 Notes, the “Notes”). The 2031 Notes are additional notes of the same series as the $600 million aggregate principal amount of 2.700% Senior Notes due 2031 that the Operating Partnership issued on June 28, 2021. The 2031 Notes offered in the Offering and such previously issued 2.700% Senior Notes due 2031 are identical (other than with respect to issue date and price) and constitute a single series.
The Operating Partnership intends to use the net proceeds from the Offering of approximately $595.5 million after deducting the underwriting discount and estimated expenses related to the Offering payable by the Operating Partnership, to repay borrowings outstanding under its senior credit facility, to fund possible future acquisitions of properties, and for working capital and general corporate purposes.
The Notes are fully and unconditionally guaranteed by the Company. The terms of the 2028 Notes are governed by an indenture, dated as of June 28, 2021 (the “Base Indenture”), by and between the Operating Partnership and UMB Bank, N.A., as trustee (the “Trustee”), as amended and supplemented by a Second Supplemental Indenture, dated as of October 5, 2021, by and among the Obligors and the Trustee (the “Second Supplemental Indenture”). The terms of the 2031 Notes are governed by the Base Indenture, as amended and supplemented by the First Supplemental Indenture, dated as of June 28, 2021, by and among the Obligors and the Trustee (the “First Supplemental Indenture”, and, together with the Base Indenture and Second Supplemental Indenture, the “Indenture”). The Indenture contains covenants that limit the ability of the Operating Partnership and its subsidiaries to (a) consummate a merger, consolidation or sale of all or substantially all of their assets; and (b) incur secured and unsecured indebtedness. The Indenture also contains covenants regarding (i) provision of financial information, (ii) maintenance of properties, (iii) payment of taxes and other claims, and (iv) insurance.
Pursuant to the Underwriting Agreement among the Obligors and the underwriters named therein (the “Underwriters”) filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on September 30, 2021, the purchase price paid by the Underwriters for the 2028 Notes was 99.205% of the principal amount thereof and the purchase price paid by the Underwriters for the 2031 Notes was 99.692% of the principal amount thereof plus accrued interest from June 28, 2021 to October 5, 2021. The Notes are the Operating Partnership’s senior unsecured obligations and rank equally in right of payment with all of the Operating Partnership’s other existing and future senior unsecured indebtedness. The Notes are effectively subordinated in right of payment to: (i) all of the Obligors’ existing and future secured indebtedness; (ii) all existing and future indebtedness and other liabilities, whether secured or unsecured of the Obligors’ subsidiaries; and (iii) all preferred equity not owned by the Obligors, if any, in their respective subsidiaries. Interest on the 2028 Notes will accrue at the rate of 2.300% per annum and will be payable semi-annually in arrears on May 1 and November 1, beginning on May 1, 2022. Interest on the 2031 Notes will accrue at the rate of 2.700% per annum and will be payable semi-annually in arrears on January 15 and July 15, beginning on January 15, 2022. The 2028 Notes will mature on November 1, 2028. The 2031 Notes will mature on July 15, 2031.
The Operating Partnership may, at its option, redeem (i) the 2028 Notes, in whole or in part, at any time or from time to time prior to September 1, 2028 (the “2028 Notes Par Call Date”) and (ii) the 2031 Notes, in whole or in part, at any time or from time to time prior to April 15, 2031 (the “2031 Notes Par Call Date”), in each case at a redemption price equal to the greater of:
•100% of the principal amount of the Notes to be redeemed; or
•a make-whole premium as defined and calculated in accordance with the Indenture;
plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date.
On or after the 2028 Notes Par Call Date (in the case of the 2028 Notes) or the 2031 Notes Par Call Date (in the case of the 2031 Notes), the Operating Partnership may, at its option, redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.
Certain events are considered events of default, which may result in the accelerated maturity of the Notes, including:
•failure to pay interest on the Notes when due, continued for 30 days;
•failure to pay principal of, or premium, if any, on, the Notes when due;
•failure by the Operating Partnership or the Company for 60 days after written notice from the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes to comply with any of the other agreements of the Operating Partnership or the Company, respectively, in the Indenture with respect to the Notes;
•failure to pay any debt (other than non-recourse debt) (a) of the Operating Partnership, the Company or any subsidiary of the Operating Partnership or the Company and (b) in an outstanding principal amount in excess of $75,000,000, at final maturity or upon acceleration after the expiration of any applicable grace period, which debt is not discharged, or such default in payment or acceleration is not cured or rescinded, within 60 days after written notice to the Operating Partnership from the Trustee (or to the Operating Partnership and the Trustee from holders of at least 25% in principal amount of the outstanding Notes);
•certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of the Operating Partnership or the Company or any significant subsidiary of either the Operating Partnership or the Company or all or substantially all of their respective property; or
•except as permitted by the Indenture, any guarantee of the Notes is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any guarantor of the Notes, or any person acting on their behalf, denies or disaffirms the obligations of a guarantor of the Notes, except, in each case, by reason of the release of such guarantee of the Notes in accordance with provisions of the Indenture.
If an event of default occurs and is continuing, the Trustee or the holders of not less than 25% in principal amount of the Notes outstanding may declare the principal amount of the Notes to be due and payable. Upon such a declaration, such principal amount will become due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization with respect to the Company occurs and is continuing, the principal amount of the Notes outstanding will become immediately due and payable without any declaration or other act on the part of the trustee or any holders of the Notes. Under certain circumstances, the holders of a majority in principal amount of the Notes outstanding may rescind any such acceleration with respect to the Notes and its consequences.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Base Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the form of Note for the 2028 Notes and the form of Note for the 2031 Notes, which are filed as Exhibits 4.1, 4.2, 4.3, 4.4, and 4.5 respectively, to this Form 8-K and incorporated by reference herein.
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
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| Exhibit No. | Description | Method of Filing |
| 4.1 | | Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 28, 2021 |
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| 4.2 | | Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 28, 2021 |
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| 4.3 | | Filed herewith |
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| 4.4 | | Included in Exhibit 4.3 filed herewith |
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| 4.5 | | Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 28, 2021 |
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| 5.1 | | Filed herewith |
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| 5.2 | | Filed herewith |
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| 5.3 | | Filed herewith |
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| 23.1 | | Included in Exhibit 5.1 filed herewith |
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| 23.2 | | Included in Exhibit 5.2 filed herewith |
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| 23.3 | | Included in Exhibit 5.3 filed herewith |
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| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | Filed herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | SUN COMMUNITIES, INC.
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Dated: October 5, 2021 | | By: | /s/ Karen J. Dearing |
| | | Karen J. Dearing, Executive Vice President, Chief Financial Officer, Secretary and Treasurer |
