Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off
Balance Sheet Arrangement of a Registrant.
On January 19, 2023, seven indirect wholly-owned subsidiaries (collectively, the
"Borrowers") of Brandywine Operating Partnership, L.P., the Delaware limited
partnership (the "Operating Partnership") through which Brandywine Realty Trust,
a Maryland real estate investment trust (the "REIT" and, together with the
Operating Partnership, the "Company"), owns its assets and conducts its
operations, entered into a secured loan agreement with Barclays Capital Real
Estate Inc., ("Barclays"), Bank of America, N.A., ("BOA"), Wells Fargo Bank,
National Association ("Wells") and Citi Real Estate Funding Inc. ("Citi" and
collectively with Barclays, BOA and Wells, the "Lenders") that provides for a
secured loan in the aggregate principal amount of $245 million (the "Secured
Facility").
The Secured Facility has a scheduled maturity date of February 6, 2028 and may
be prepaid in full on or after March 6, 2025, subject to a prepayment premium,
and may be prepaid in full on or after August 6, 2027 without any prepayment
premium.
The Secured Facility bears interest at 5.875% per year through the maturity date
and is interest-only (payable monthly) through the maturity date.
The Company used the net proceeds of the loan for general corporate purposes,
including to reduce outstanding borrowings under the Company's unsecured
revolving credit facility. As of January 20, 2023 and after giving effect to the
foregoing reduction, there is $600 million of unused availability under the
unsecured revolving credit facility.
The Secured Facility is cross-collateralized and secured by first priority
mortgages, deeds of trust or similar security instruments, assignments of leases
and rents and security interests in the following properties (collectively, the
"Properties") owned or held under long-term ground leases through the Borrowers:
Metroplex (4000 Chemical Road, Plymouth Meeting, PA); 500 North Gulph Road, King
of Prussia, PA; 933 First Avenue, King of Prussia, PA; The Bulletin Building
(3025 Market Street, Philadelphia, PA); 1900 Market Street, Philadelphia, PA;
Four Points Centre 3 (11120 Four Points Drive, Austin, TX); and 405 Colorado
Avenue, Austin, TX. From and after March 6, 2025, one or more of the Properties
may be released from the Secured Facility subject to certain conditions,
including a partial prepayment of the Secured Facility based on the amount of
the loan allocated to the property(ies) to be released together with other
amounts due in connection with such partial prepayment pursuant to the loan
agreement.
The Secured Facility is (i) non-recourse except for customary carve-outs,
including those relating to environmental matters, intentional
misrepresentations by the Borrowers, misappropriation of funds, waste, failure
to pay for labor or materials that create liens, taxes, failure to maintain
insurance, failure to maintain single-purpose entities, failure to adhere to
certain covenants related to ground leases, and unpermitted subordinate
financings and (ii) full recourse in the event of certain unpermitted transfers
and unpermitted encumbrances, voluntary bankruptcy and/or certain involuntary
bankruptcy of the Borrowers, certain breaches of covenants related to the ground
leases, and violation by the Borrower of certain other covenants. The recourse
obligations of the Borrowers have been guaranteed by the Operating Partnership.
The Lenders may exercise certain rights under the loan documents, including the
right to accelerate payment of the entire balance of the loans (including fees
and the prepayment premium), upon events of default. The loan documents contain
customary events of default with corresponding grace periods, including, without
limitation, payment defaults, bankruptcy-related defaults and defaults caused by
a failure by the Borrowers to perform certain of their obligations under the
loan documents or by a breach by the Borrowers of their representations and
warranties in the loan documents. The loan documents also contain customary
financial, leasing and environmental covenants, cash management and reserve
requirements, requirements regarding the management and maintenance of the
Properties and maintenance of insurance on the Properties, transfer restrictions
and limitations on the incurrence of debt and granting of liens.
The Borrowers are required to pay certain fees and expenses to the Lenders in
connection with the Secured Facility.
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Item 8.01. Other Events.
On January 20, 2023 (the "Redemption Date"), Brandywine Operating Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership"), completed
the previously announced redemption of approximately $54.3 million aggregate
principal amount of its outstanding 3.95% Guaranteed Notes due February 15, 2023
(the "Notes"). The redemption price of the Notes was approximately $55.2
million. The redemption price includes approximately $0.92 million of accrued
and unpaid interest to the Redemption Date. Interest ceased to accrue on the
Notes upon completion of such redemption. The aggregate redemption price of the
Notes was paid by the Operating Partnership from available cash balances.
As of January 20, 2023, and after giving effect to the use of proceeds as
described under Item 2.03, the Company has approximately $2.074 billion of
wholly-owned consolidated debt, comprised of (i) approximately $1.829 billion of
unsecured debt with a weighted average maturity (in years) of 5.0 and (ii)
approximately $0.245 billion of secured debt with a weighted average maturity
(in years) of 5.1. In addition, after giving effect to interest rate swaps in
effect, approximately 96% of the Company's consolidated debt bears interest at a
weighted average fixed rate of 5.031% per annum.
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