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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 (Date of earliest event reported) May 18, 1999
BRT REALTY TRUST
(Exact name of registrant as specified in charter)
Massachusetts I-7172 13-2755856
(State or other (Commission File No.) (IRS Employer I.D. No.)
jurisdiction of
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (516) 466-3100
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Item 5. Other Events
On May 18, 1999, Registrant consummated a $45 million revolving credit
facility with Transamerica Business Credit Corporation. The material terms of
the transaction are as follows:
Lender: Transamerica Business Credit Corporation
Borrower: Registrant. In addition, BRT Funding Corp., a wholly-owned
subsidiary of Registrant, is a co-borrower.
Loan Type: The loan is a revolving facility (i.e. funds can be borrowed,
repaid and borrowed again).
Amount: Up to $45 million. As of the date hereof, $5 million has been
advanced under the credit facility.
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Use of
Proceeds: Loan advances may be used (i) to originate or acquire mortgage
loans, (ii) to purchase all or substantially all of the stock or
other ownership interests or all or substantially all of the
assets of a financial services company or to capitalize a newly
formed subsidiary to be engaged in the business of banking or
otherwise providing financial services, in each case approved by
Lender (such approval not to be unreasonably withheld), and (iii)
for ongoing working capital.
Maturity: The loan matures May 18, 2002.
Rate: Advances under the credit facility bear interest at either (i)
the prime rate (as set forth in the Wall Street Journal) plus
.50% per annum or (ii) LIBOR plus 3.25% per annum; provided,
however, that the interest rate applicable to LIBOR rate advances
shall be the LIBOR rate plus 3.0% per annum for advances
outstanding as of the last month of any twelve-month period
following the first anniversary of the closing date during which
twelve-month period the average monthly outstanding amount of the
loan was equal to or greater than $10,000,000. Subject to
certain timing and size requirements, Registrant is entitled to
choose between the two interest rates. The interest rate is
adjusted monthly.
Fees: There was a 3/4% ($337,500) commitment fee paid in connection
with the loan. Registrant also paid the out of pocket expenses of
the Lender in connection with the transaction (including by way
of example, legal fees).
In addition, there is an "unused fee" payable monthly and equal
to .125% per annum of the difference between the loan balance and
the maximum loan amount of $45,000,000.
Collateral: There is a requirement that the loan amount never exceed 80% of
the approved collateral that has been pledged to Lender as
security for the loan. If a pledged loan goes into default or the
Lender determines, in accordance with the loan documents, that
collateral is no longer acceptable, then Registrant must either
provide additional or substitute collateral or prepay the loan to
the extent there is a collateral deficit.
Financial
Covenants: (1) On a consolidated basis, Registrant's net worth must be at
least $70 million, (2) Registrant
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shall not permit the Interest Coverage Ratio (being defined as
net income plus interest expense to interest expense)to be less
than 1.75:1.00 over specified periods, (2) Registrant shall not
permit, as of the last day of each calendar quarter, the ratio of
(i) the debt of Registrant and its subsidiaries to (ii) tangible
net worth to exceed 1.00:1.00, (3) Registrant shall not permit,
as of the last day of each month, the ratio of the principal
balance of all delinquent pledged loans to all pledged loans to
exceed 0.20:1.00, and (4) Registrant shall not make capital
expenditures totaling in excess of $250,000 in the aggregate in
any fiscal year, except for capital expenditures related solely
to improving real property owned by the Registrant and pledged to
Lender and other property owned by Borrowers or constituting
collateral for its loan receivables.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements - none.
(b) Pro Forma Financial Information - not applicable.
(c) Exhibits - Loan and Security Agreement dated as of May 18, 1999
between BRT Realty Trust, BRT Funding Corp. and Transamerica
Business Credit Corporation.
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 officer thereunto duly authorized.
BRT REALTY TRUST
Date: May 25, 1999 /s/ Mark H. Lundy
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Mark H. Lundy
(Vice President)
LOAN AND SECURITY AGREEMENT