Piedmont Office Realty Trust Inc. filed SEC Form 8-K: Creation of a Direct Financial Obligation
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| Item 1.01. | Entry into a Material Definitive Agreement |
The information set forth under Item 2.03, “Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant” 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 |
On February 13, 2025, Piedmont Operating Partnership, LP (“Piedmont OP”), a wholly-owned subsidiary of Piedmont Office Realty Trust, Inc. (the “Registrant”), amended its $200 million unsecured 2024 term loan (the “Unsecured 2024 Term Loan”) to increase the principal amount by $125 million to $325 million and add two six-month extension options to the term as well as to make various other conforming changes. The net proceeds from the increased principal amount, along with cash on hand and the Unsecured 2022 Line of Credit were used to repay a $250 million unsecured term loan that was scheduled to mature in March of 2025.
On February 13, 2025, Piedmont OP entered into an amended and restated revolving credit agreement (the “Second Amended and Restated Revolving Credit Agreement”) amending and restating its existing $600 million unsecured 2022 line of credit (the “Unsecured 2022 Line of Credit”). As amended and restated, the maturity date of the Unsecured 2022 Line of Credit has been extended to June 30, 2028, and Piedmont OP may extend the term for up to two additional years (through two available one year extensions) provided that Piedmont OP is not then in default and all representations and warranties under the Unsecured 2022 Line of Credit are true and correct in all material respects and upon payment of applicable extension fees. Additionally, under certain terms of the Second Amended and Restated Revolving Credit Agreement, Piedmont OP may increase the new facility by up to an additional $500 million, to an aggregate size of $1.1 billion, provided that no existing bank has any obligation to participate in such increase. Piedmont OP paid customary arrangement and upfront fees to the lenders in connection with the closing of the new facility.
The Unsecured 2022 Line of Credit has the option to bear interest at varying levels (determined with reference to the greater of the credit rating (as defined in the Second Amended and Restated Revolving Credit Agreement) for the Registrant or Piedmont OP) based on the Adjusted Term Secured Overnight Financing Rate (“SOFR”) Rate, the Adjusted Daily Effective SOFR Rate, or the Base Rate, defined as the greater of the prime rate, the Federal Reserve Bank of New York rate plus 0.5%, or the Adjusted Term SOFR Rate for a one-month period plus 1.0%. The term SOFR loans are available with interest periods selected by Piedmont OP of one, three, or six months. The stated interest rate spread over Adjusted SOFR can vary from 0.725% to 1.40% based upon the greater of the then current credit rating (as defined in the Second Amended and Restated Revolving Credit Agreement) of Registrant or Piedmont OP; provided that, upon achievement of a certain leverage ratio and dependent upon the Registrant or Piedmont OP’s then current credit rating, the applicable margin could be based upon that of the next higher credit rating. As of the closing of the amended and restated Unsecured 2022 Line of Credit, the current stated Adjusted SOFR spread on the loan is 1.05%.
Under the Unsecured 2022 Line of Credit, Piedmont OP is subject to certain financial covenants that require, among other things, the maintenance of an unencumbered interest coverage ratio of at least 1.75, an unencumbered leverage ratio of at least 1.60, a fixed charge coverage ratio of at least 1.50, a net leverage ratio of no more than 0.60, and a secured net debt ratio of no more than 0.40.
The foregoing does not purport to be a complete description of the terms of the Unsecured 2024 Term Loan or the Unsecured 2022 Line of Credit and is qualified in its entirety by reference to the amendment to the Unsecured 2024 Term Loan agreement and the Second Amended and Restated Revolving Credit Agreement, which are attached as Exhibits 10.1 and 10.2, respectively, hereto.
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits: |
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.
| Piedmont Office Realty Trust, Inc. | ||||||
| Date: February 13, 2025 | By: | /s/ Sherry L. Rexroad | ||||
| Sherry L. Rexroad | ||||||
| Chief Financial Officer and Executive Vice President | ||||||