Alexandria Real Estate Equities Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
$ARE
Real Estate Investment Trusts
Real Estate
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 18, 2024
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Item 1.01. Entry into a Material Definitive Agreement
Escrow Agreement
On July 18, 2024, Alexandria Real Estate Equities, Inc., a Maryland corporation (the “Company”), and its subsidiary, Alexandria Real Estate Equities, L.P., a Delaware limited partnership (the “Operating Partnership”), entered into an escrow agreement (the “Escrow Agreement”) with Citibank, N.A., as administrative agent (the “Administrative Agent”), certain lenders (the “Lenders”) and O'Melveny & Myers LLP, as escrow agent (the “Escrow Agent”), pursuant to which the Company, the Operating Partnership, the Administrative Agent, and the Lenders, intending to enter into a third amended and restated credit agreement in the form attached as an exhibit thereto (the “Third Amended Credit Agreement”), submitted their signature pages to the Third Amended Credit Agreement to be held by the Escrow Agent in escrow. Pursuant to the Escrow Agreement, the Escrow Agent will release the signatures to the Third Amended Credit Agreement and the Third Amended Credit Agreement will become effective upon satisfaction by the Company of certain conditions precedent to the effectiveness of the Third Amended Credit Agreement set forth in the Third Amended Credit Agreement. If the conditions are not satisfied by the Company on or prior to October 1, 2024, the Third Amended Credit Agreement signature pages will be deemed to have been revoked, the escrow arrangements under the Escrow Agreement will terminate, and the Third Amended Credit Agreement will not become effective.
The conditions to be satisfied by the Company include the delivery of certain legal opinions and certificates, the termination of, and payment in full of the obligations under, the Second Amended and Restated Credit Agreement, dated as of June 28, 2023 (the “Existing Credit Agreement”), among the Company, the Operating Partnership, the other guarantors (if any) from time to time party thereto, each lender from time to time party thereto, each L/C issuer from time to time party thereto and Citibank, N.A., as the administrative agent, and the payment of prescribed fees. While there can be no assurance in this regard, the Company expects that it will satisfy the conditions on or prior to October 1, 2024, and that the Third Amended Credit Agreement will thereupon become effective. The purpose and effect of the Escrow Agreement are to permit the Company to “lock in” the current terms and conditions of the Third Amended Credit Agreement and the identities of the lenders thereunder while deferring the commencement of the term of the credit facility to be provided under the Third Amended Credit Agreement until the Company satisfies the conditions to effectiveness. As a result, the term of the Third Amended Credit Agreement will not begin and the Company will not be able to avail itself of the credit provided thereby until conditions to the effectiveness of the Third Amended Credit Agreement are satisfied.
Credit Agreement
Upon effectiveness, the Third Amended Credit Agreement is expected to replace the Company’s Existing Credit Agreement. Citibank, N.A. is anticipated to serve as administrative agent; Citibank, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, The Bank of Nova Scotia, Mizuho Bank, Ltd., Barclays Bank PLC, Sumitomo Mitsui Banking Corporation, TD Bank, N.A., and U.S. Bank National Association are expected to serve as joint lead arrangers; and Citibank, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, and RBC Capital Markets are expected to serve as joint bookrunners under the Third Amended Credit Agreement. The Third Amended Credit Agreement is expected to provide for, among other things, a $5 billion unsecured senior revolving credit facility (the “Revolving Credit Facility”) and an accordion option to increase aggregate commitments under the Credit Agreement by up to an additional $1 billion. Borrowings under the Revolving Credit Facility are anticipated to bear interest at a “Floating Rate,” “Daily RFR Rate,” or “Base Rate” specified in the Third Amended Credit Agreement, plus, in any case, a margin specified in the Third Amended Credit Agreement. The margin at closing applicable to loans based on the Floating Rate and Daily RFR is anticipated to be 0.855%, including a credit spread adjustment of 10 basis points and a Sustainability Margin Adjustment (as specified in the Third Amended Credit Agreement) reduction of two basis points.
The Third Amended Credit Agreement is expected to extend the maturity date for the Revolving Credit Facility to January 22, 2030, provided that the Company exercises its rights to extend the maturity date twice by an additional six months for each exercise upon the satisfaction of certain conditions.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 is incorporated herein by reference.
Forward-looking Statements
This current report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of these words or similar words, and include (without limitation) statements regarding the anticipated effectiveness and maturity date of the Credit Agreement and the expected satisfaction of the conditions to the Credit Agreement. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in each such statement. A number of important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking statements, including, but not limited to, the factors described in the Company's filings with the Securities and Exchange Commission, including the Company's most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q. The Company does not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any other document, whether as a result of new information, future events, or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ALEXANDRIA REAL ESTATE EQUITIES, INC. | ||||||||||||||
| Date: July 18, 2024 | By: | /s/ Marc E. Binda | ||||||||||||
| Marc E. Binda | ||||||||||||||
| Chief Financial Officer and Treasurer | ||||||||||||||