Business Context and Reporting Period
This Form 8-K filing by Ares Commercial Real Estate Corporation (ACRE) reports a material definitive agreement entered into on December 8, 2016. The filing concerns an amendment to the Company's existing Master Repurchase Agreement with Citibank, N.A.
Key Financial Metrics
- Facility Type: Master Repurchase Agreement (Citibank Facility).
- Outstanding Advances: $302.2 million as of the Extension Date.
- Existing Interest Rate: One-month LIBOR plus 2.32% per annum (unchanged for existing advances).
- New Advance Interest Rate: One-month LIBOR plus a pricing margin range of 2.25% to 2.50% per annum.
Material Changes
The primary material change is the extension of the facility's maturity timeline:
- Initial Maturity Extension: Extended from the original date to December 10, 2018.
- Extension Options: The facility now includes three one-year extension options exercisable at the Company's option, potentially extending the maturity to December 9, 2019, December 8, 2020, and December 8, 2021.
- Conditions: Extensions are subject to the satisfaction of certain conditions, including the absence of existing defaults and the payment of applicable extension fees.
Outlook, Risks, and Contingencies
The filing does not provide specific forward-looking guidance, management commentary on future performance, or a discussion of general risks beyond the conditions required to exercise the extension options. The agreement is contingent upon the Company maintaining no existing defaults under the facility.
Investor Verification Checklist
- Verify the full text of the Third Amendment to the Master Repurchase Agreement (Exhibit 10.1) for specific default conditions and extension fee amounts.
- Confirm the Company's current status regarding any potential defaults that could impact the ability to exercise extension options.
- Monitor future filings for the exercise of the one-year extension options and any changes to the pricing margin for new advances.