Item 1.01 Entry into a Material Definitive Agreement.
On March 30, 2021, Urstadt Biddle Properties Inc. (the "Company") entered into a
$125 million Amended and Restated Unsecured Credit Agreement (the "Credit
Agreement") with a syndicate of three banks led by The Bank of New York Mellon,
as administrative agent. The syndicate also includes Wells Fargo Bank N.A. and
Bank of Montreal (co-syndication agents). The Company's repayment obligations
under the Credit Agreement are guaranteed by the Company's subsidiaries that own
real estate unencumbered by mortgages. Under the Credit Agreement, the Company
may request the issuance of letters of credit up to an aggregate amount of $10
million.
Loans made and letters of credit issued under the Credit Agreement can be used
for general corporate purposes.
The lenders' commitments under the Credit Agreement will terminate on March 29,
2024, the maturity date. The outstanding principal balance of borrowings under
the Credit Agreement will be due on the maturity date. The Company has the
option to increase the capacity under the Credit Agreement up to $175 million
from $125 million to the extent existing lenders or other lenders agree to
provide the additional commitment. In addition, the Company has the ability,
upon satisfaction of certain conditions outlined in the Credit Agreement, to
extend the maturity date of the facility to March 28, 2025.
The Company may elect to have loans under the Credit Agreement bear interest at
(a) a Eurodollar rate based on LIBOR, plus an applicable margin of 1.45% to
2.20%, depending on the percentage that the Company's consolidated total
indebtedness represents of the gross asset value (as such terms are defined in
the agreement), or (b) a base rate equal to The Bank of New York Mellon's prime
lending rate plus 0.45% to 1.20%. In addition, the Company will pay a quarterly
commitment fee on the average daily un-advanced portion of the total amount
committed under the Credit Agreement at a rate of 0.25%, if borrowings under the
Credit Agreement are less than 50% of the total commitment amount, or 0.15%, if
borrowings equal or exceed 50% of the total commitment amount. The Credit
Agreement includes market standard provisions for determining the benchmark
replacement rate for LIBOR.
The Credit Agreement contains representations and financial and other
affirmative and negative covenants usual and customary for this type of
agreement. So long as any amounts remain outstanding or unpaid under the Credit
Agreement, the Company must satisfy certain financial covenants: (1) unsecured
indebtedness may not exceed $400 million; (2) secured indebtedness may not
exceed 40% of gross asset value, as determined under the Credit Agreement; (3)
total secured and unsecured indebtedness, excluding preferred stock, may not be
more than 60% of gross asset value; (4) total secured and unsecured
indebtedness, plus preferred stock, may not be more than 70% of gross asset
value; (5) unsecured indebtedness may not exceed 60% of the eligible real asset
value of unencumbered properties in the unencumbered asset pool as defined under
the Credit Agreement; (6) earnings before interest, taxes, depreciation and
amortization must be at least 175% of fixed charges, which exclude preferred
stock dividends; (7) the net operating income from unencumbered properties must
be 200% of unsecured interest expenses; (8) not more than 25% of the gross asset
value and unencumbered asset pool may be attributable to the Company's pro rata
share of the value of unencumbered properties owned by non-wholly owned
subsidiaries or unconsolidated joint ventures; and (9) the number of
un-mortgaged properties in the unencumbered asset pool must be at least 10 and
at least 10 properties must be owned by the Company or a wholly owned
subsidiary. For purposes of these covenants, eligible real estate value is
calculated as the sum of the Company's properties annualized net operating
income for the prior four fiscal quarters capitalized at 6.75% and the purchase
price of any eligible real estate asset acquired during the prior four fiscal
quarters. Gross asset value is calculated as the sum of (a) eligible real
estate value; (b) the Company's pro rata share of eligible real estate value of
eligible joint venture assets; (c) cash and cash equivalents; (d) marketable
securities; (e) the book value of the Company's construction projects and the
Company's pro rata share of the book value of construction projects owned by
unconsolidated joint ventures and (f) eligible mortgages and trade receivables,
as defined in the agreement.
The Credit Agreement includes usual and customary events of default and remedies
for facilities of this nature (with customary grace periods, as applicable) and
provides that, upon the occurrence and continuation of an event of default,
payment of all amounts payable under the Credit Agreement may be accelerated
and/or the lenders' commitments may be terminated. In addition, upon the
occurrence of certain insolvency or bankruptcy related events of default, all
amounts payable under the Credit Agreement will automatically become immediately
due and payable and the lenders' commitments will automatically terminate.
The Company has customary corporate and commercial banking relationships with
the lenders and agents.
A copy of the Credit Agreement is attached hereto as Exhibit 10.1 and
incorporated herein by reference herein.
Item 1.02 Termination of a Material Definitive Agreement.
On March 30, 2021, in connection with the entry into the Credit Agreement, the
Company terminated its $100 million unsecured revolving credit agreement, dated
as of August 23, 2016, with a syndicate of three banks led by The Bank of New
York Mellon as administrative agent and Wells Fargo Bank N.A. and Bank of
Montreal as co-syndication agents.
For a description of the material terms and conditions of the terminated
unsecured credit facility, see Item 7 in the Company's Annual Report on Form
10-K for the year ended October 31, 2020, which Item 7 is incorporated 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 set forth under Item 1.01 of this Form 8-K is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) The following exhibits are filed as part of this report:
10.1 Amended and Restated Credit Agreement, dated as of March 30, 2021, by and
among Urstadt Biddle Properties Inc., The Bank of New York Mellon, as
Administrative Agent, and Wells Fargo Bank, N.A. and Bank of Montreal, as
co-syndication agents.
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