Item 1.01 Entry into a Material Definitive Agreement.
On January 4, 2023, Sabra Health Care Limited Partnership, of which Sabra Health
Care REIT, Inc. ("Sabra") is the sole general partner (the "Operating
Partnership"), and Sabra Canadian Holdings, LLC, also a wholly owned subsidiary
of Sabra (together, the "Borrowers"), and the other parties thereto entered into
a sixth amended and restated unsecured credit agreement (the "Credit Agreement")
with certain lenders as set forth therein; Bank of America, N.A., as
Administrative Agent and L/C Issuer; Citizens Bank, National Association, Crédit
Agricole Corporate and Investment Bank and Wells Fargo Bank, National
Association, as Co-Syndication Agents and L/C Issuers; The Bank of Nova Scotia,
Fifth Third Bank, JPMorgan Chase Bank, N.A., Keybank National Association,
Mizuho Bank, Ltd., and Truist Bank, as Co-Documentation Agents; BofA Securities,
Inc., as Joint Lead Arranger and Sole Bookrunner; and Citizens Bank, National
Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo
Securities, LLC, as Joint Lead Arrangers. The Credit Agreement amends and
restates the fifth amended and restated unsecured credit agreement (as amended,
the "Prior Credit Agreement") that the Borrowers entered into on September 9,
2019. Capitalized terms used but not defined in this Item 1.01 have the meanings
set forth for such terms in the Credit Agreement.
The Credit Agreement includes a $1.0 billion revolving credit facility (the
"Revolving Credit Facility"), a $430.0 million U.S. dollar term loan and a CAD
$150.0 million Canadian dollar term loan (collectively, the "Term Loans"). The
Prior Credit Agreement included a $1.0 billion revolving credit facility,
$1.1 billion in U.S. dollar term loans and a CAD $125.0 million Canadian dollar
term loan. Further, up to $350.0 million of the Revolving Credit Facility may be
used for borrowings in certain foreign currencies (from $175.0 million in the
Prior Credit Agreement). The Credit Agreement also contains an accordion feature
that can increase the total available borrowings to $2.75 billion (unchanged
from the Prior Credit Agreement), subject to terms and conditions.
The Revolving Credit Facility has a maturity date of January 4, 2027, and
includes two six-month extension options. The U.S. dollar Term Loan has a
maturity date of January 4, 2028, and the Canadian dollar Term Loan has a
maturity date of January 4, 2028.
Borrowings under the Revolving Credit Facility bear interest on the outstanding
principal amount at a rate equal to a ratings-based applicable interest margin
plus, at the Operating Partnership's option, either (a) SOFR or (b) a base rate
determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the
prime rate, and (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0%
(the "Base Rate"). The ratings-based applicable interest margin for borrowings
will vary based on the Debt Ratings, as defined in the Credit Agreement, and
will range from 0.775% to 1.450% per annum for SOFR based borrowings and 0.00%
to 0.450% per annum for borrowings at the Base Rate. In addition, the Operating
Partnership pays a facility fee ranging between 0.125% and 0.300% per annum
based on the aggregate amount of commitments under the Revolving Credit Facility
regardless of amounts outstanding thereunder.
The U.S. dollar Term Loans bear interest on the outstanding principal amount at
a ratings-based applicable interest margin plus, at the Operating Partnership's
option, either (a) SOFR or (b) the Base Rate. The ratings-based applicable
interest margin for borrowings will vary based on the Debt Ratings and will
range from 0.850% to 1.650% per annum for SOFR based borrowings and 0.00% to
0.650% per annum for borrowings at the Base Rate. The Canadian dollar Term Loan
bears interest on the outstanding principal amount at a rate equal to the
Canadian Dollar Offered Rate ("CDOR") plus an interest margin that will range
from 0.850% to 1.650% depending on the Debt Ratings.
The obligations of the Borrowers under the Credit Agreement are guaranteed by
Sabra and certain subsidiaries of Sabra.
The Credit Agreement contains customary covenants that include restrictions or
limitations on the ability to pay dividends, incur additional indebtedness,
engage in non-healthcare related business activities, enter into transactions
with affiliates and sell or otherwise transfer certain assets as well as
customary events of default. The Credit Agreement also requires Sabra, through
the Operating Partnership, to comply with specified financial covenants, which
include a maximum total leverage ratio, a maximum secured debt leverage ratio, a
minimum fixed charge coverage ratio, a maximum unsecured leverage ratio, a
minimum tangible net worth requirement and a minimum unsecured interest coverage
ratio.
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The Credit Agreement is filed as Exhibit 10.1 to this Form 8-K and is
incorporated herein by this reference. This description of the material terms of
the Credit Agreement is qualified in its entirety by reference to such exhibit.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure in Item 1.01 is incorporated herein by reference into this Item
2.03.
Item 8.01 Other Events.
On January 5, 2023, Sabra issued a press release regarding the Credit Agreement.
A copy of the press release is attached as Exhibit 99.1 hereto and is
incorporated in this Item 8.01 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Sixth Amended and Restated Credit Agreement, dated January 4, 2023,
among Sabra Health Care Limited Partnership and Sabra Canadian Holdings,
LLC, as Borrowers; Sabra Health Care REIT, Inc., as a guarantor; the other
guarantors party thereto; the lenders party thereto; Bank of America,
N.A., as Administrative Agent and L/C Issuer; Citizens Bank, National
Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo
Bank, National Association, as Co-Syndication Agents and L/C Issuers; The
Bank of Nova Scotia, Fifth Third Bank, JPMorgan Chase Bank, N.A., Keybank
National Association, Mizuho Bank, Ltd., and Truist Bank, as
Co-Documentation Agents; BofA Securities, Inc., as Joint Lead Arranger and
Sole Bookrunner; and Citizens Bank, National Association, Crédit Agricole
Corporate and Investment Bank and Wells Fargo Securities, LLC, as Joint
Lead Arrangers.
99.1 Press Release of Sabra Health Care REIT, Inc., dated January 5, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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