Business Context and Reporting Period
Company: Community Healthcare Trust Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: March 30, 2017 (Earliest event reported: March 29, 2017)
Context: The Company, through its operating partnership, entered into a Second Amended and Restated Credit Agreement with a syndicate of lenders co-led by SunTrust Robinson Humphrey Inc., BB&T, and Fifth Third Bank.
Key Financial Metrics and Debt Structure
This filing details the restructuring of the Company's credit facilities rather than reporting operational financial results (revenue, profit, or cash flow). The filing text does not provide a clear value for revenue, profit, or operating cash flow.
Debt and Liquidity Facilities
- Total Facility Capacity: Up to $450.0 million (including accordion feature).
- Revolving Facility: $150.0 million; matures August 2019 with two 12-month extension options.
- 5-Year Term Loan: $50.0 million; matures March 2022.
- 7-Year Term Loan: $50.0 million; matures March 2024.
- Accordion Feature: Additional capacity of up to $200.0 million subject to lender commitments.
- Interest Rates (Floating):
- Revolving: LIBOR + 1.75% to 2.75% (currently 2.25%).
- 5-Year Term: LIBOR + 2.20% to 2.90% (currently 2.20%).
- 7-Year Term: LIBOR + 2.20% to 2.90% (currently 2.40%).
- Interest Rate Hedging: Company intends to enter interest rate swaps to fix rates on term loans in the range of 4.15% to 4.55%.
- Repayment Terms: Interest-only payments with full principal due at maturity; prepayment allowed without penalty.
Material Changes Versus Prior Period
The Second Amended and Restated Credit Agreement amends and restates the previous agreement dated August 10, 2016. Key changes include:
- Expansion of total borrowing capacity via an accordion feature up to $450.0 million.
- Introduction of specific 5-year and 7-year term loan facilities with delayed draw features (available in up to three draws within 15 months, minimum $10.0 million per draw).
- Adjustment of interest rate margins and maturity dates compared to the prior facility.
Guidance, Outlook, Risks, and Contingencies
Management Commentary: The Company intends to utilize interest rate swap agreements to mitigate floating rate risk on the term loans.
Risks and Covenants: Borrowing is subject to compliance with customary affirmative and negative covenants, including limitations on liens, indebtedness, distributions, mergers, investments, restricted payments, and asset sales. The agreement includes financial maintenance covenants and customary events of default which could allow lenders to terminate commitments and accelerate payments.
Unusual Items: None reported in this filing.
Investor Verification Checklist
- Verify the full text of the Second Amended and Restated Credit Agreement in the upcoming Form 10-Q for the quarter ending March 31, 2017.
- Confirm the execution of interest rate swap agreements to lock in the projected fixed rates of 4.15% to 4.55%.
- Monitor compliance with financial maintenance covenants to ensure continued access to the $450.0 million facility.
- Review the utilization of the delayed draw feature for the term loans within the 15-month window.