Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed, on August 31, 2018, Centerspace, LP (the “Partnership”) entered into, and Centerspace (the “Company”) and Centerspace, Inc. (the “Corporation”) guaranteed the obligations of the Partnership under, that certain Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”), for which KeyBank, National Association and PNC Bank, National Association acted as Syndication Agents, and Bank of Montreal acted as Administrative Agent. On September 30, 2021 the Partnership, the Company and the Corporation entered into a Third Amended and Restated Credit Agreement, for which Bank of America, N.A., and PNC Bank, National Association, acted as Syndication Agents, and Bank of Montreal, as Administrative Agent (the “Agreement”), which Agreement amended and restated the Prior Credit Agreement. The Agreement provides the following:
a.a $250,000,000 revolving credit facility to the Partnership, which facility is guaranteed by the Company and the Corporation pursuant to the terms of the Agreement;
a.an uncommitted $400,000,000 accordion option that can be accessed by increasing lending commitments;
a.extends the maturity date of the line of credit to September 2025; and
a.modifies certain covenants to be consistent with the corresponding covenants in the Partnership’s private placement note facilities with Prudential.
The interest rate applicable to the loans ranges between 0.725% and 1.40% and is currently determined with respect to leverage ratio of the Company. Subject to certain conditions, if the Company and/or the Partnership is rated at a certain investment grade level by S&P or Moody’s, the rate of interest that accrues on the revolving loans may thereafter be determined with reference to the Company’s credit rating.
The foregoing description of the Agreement is qualified in its entirety by reference to the full and complete terms of the Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.