MONMOUTH REAL ESTATE INVESTMENT CORP: Conclusion of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, financial statements and supporting documents (Form 8-K)


Item 1.01 Conclusion of a Material Definitive Agreement.

Monmouth Real Estate Investment Company (“Monmouth” or the “Company”) has entered into a Term Loan Agreement dated December 15, 2021 (the “Term Loan Agreement”), with Monmouth, as borrower, the guarantors from time to time who are parties thereto and JPMorgan Chase Bank, NA. as Administrative Agent and Principal Organizer and Sole Bookrunner (“JPMorgan”). The term loan agreement provides for a $ 175,000,000 deferred drawing unsecured term loan facility which, based on the Company’s current indebtedness, bears interest at a spread of 140 basis points over LIBOR.

Loans issued under the Term Loan Agreement will bear, at the option of the Company, either interest at the rate (i) of LIBOR plus 130 basis points to 200 basis points, depending on the leverage ratio of the Company, or (ii) the base rate plus 30 basis points per 100 basis points, depending on the Company’s leverage ratio.

In addition, the Company incurs a commitment fee at an annual rate equal to 0.20% of the unused portion of the total amount committed under the Term Loan Agreement, which fee will be payable quarterly based on borrowings. price and the unused portion of the total amount committed under the term loan agreement during the applicable quarter.

The Term Loan Agreement contains customary covenants similar to the Company’s current Amended and Restated Credit Agreement dated November 15, 2019 (the “A&R Credit Agreement”), including, but not limited to, restrictions on the acquisition of privileges, sale of assets and other fundamental business changes. In addition, the term loan agreement also requires the Company to comply with various financial and restrictive covenants including, without limitation, maintenance of REIT status, maximum leverage ratio, service coverage ratio minimum debt, an unsecured leverage ratio and a minimum tangible net value threshold. The term loan agreement includes the same events of default and the same remedies for default as the A&R credit agreement, including the acceleration of amounts due under the term loan agreement.

The Company’s obligations under the Term Loan Agreement are guaranteed by each direct and indirect wholly owned subsidiary of the Company that holds an unencumbered real estate asset (as defined in the Term Loan Agreement).

JPMorgan has from time to time provided, and may in the future, provide various financial advisory, investment banking and general fundraising services for the Company, for which JPMorgan has received and will collect customary fees and expenses.

The description of the Term Loan Agreement in this current report on Form 8-K is qualified in its entirety by reference to the Full Term Loan Agreement which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this current report on Form 8-K is incorporated by reference in this Item 2.03.

Item 9.01 Financial statements and supporting documents.



(d) Exhibits.



Exhibit No.

10.1            Term Loan Agreement, dated as of December 15, 2021, among Monmouth
              Real Estate Investment Corporation, as borrower, the guarantors and
              lenders from time to time party thereto, and JPMorgan Chase Bank,
              N.A., as administrative agent, sole lead arranger and sole book
              runner.

104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)




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