Business Context and Reporting Period
This Form 8-K Current Report, dated September 10, 2021, pertains to Broadstone Net Lease, Inc. (the "Company") and its operating partnership, Broadstone Net Lease, LLC (the "Issuer"). The filing reports the entry into a material definitive agreement and the creation of a direct financial obligation through the closing of an underwritten public offering of senior notes.
Key Financial Metrics and Transaction Details
The Company closed an offering of $375 million aggregate principal amount of 2.600% Senior Notes due 2031. The notes were sold at a purchase price of 99.166% of the principal amount. Interest is payable semiannually on March 15 and September 15, commencing March 15, 2022. The notes are senior unsecured obligations, fully and unconditionally guaranteed by the Company, and rank equally with other existing senior unsecured indebtedness. They are effectively subordinated to secured indebtedness and liabilities of non-guarantor subsidiaries.
| Metric | Value |
|---|---|
| Principal Amount | $375 million |
| Coupon Rate | 2.600% per annum |
| Maturity Date | September 15, 2031 |
| Issue Price | 99.166% of principal |
| First Interest Payment | March 15, 2022 |
Material Changes and Covenants
The issuance of the Notes represents a material increase in the Company's long-term debt obligations. The Indenture includes restrictive covenants requiring the Company to maintain a certain percentage of total unencumbered assets. Additionally, the Indenture mandates that certain subsidiaries may be required to guarantee the Notes in the future if they guarantee the Issuer's revolving credit facility, senior unsecured notes, or unsecured term loans.
Redemption, Default, and Risks
The Notes are redeemable at the Issuer's option at a price equal to 100% of the principal plus accrued interest and a make-whole premium, except for redemptions on or after June 15, 2031, where no make-whole premium applies. Events of default include failure to pay interest or principal, breach of covenants (with a 60-day cure period), failure to pay other significant debt exceeding $50.0 million, invalidation of the Guarantee, and bankruptcy or insolvency proceedings. The filing does not provide specific revenue, profit, or cash flow figures for the reporting period.
Investor Verification Checklist
- Verify the exact net proceeds received after underwriting discounts and issuance costs.
- Review the specific percentage threshold for total unencumbered assets required by the Indenture covenants.
- Confirm the status of any existing secured indebtedness that ranks senior to these Notes.
- Examine the Underwriting Agreement (Exhibit 1.1) for details on underwriting fees and indemnities.
- Assess the impact of the new debt service obligations on the Company's liquidity and leverage ratios.