Business Context and Reporting Period
Company: U-Store-It Trust (Cubesmart)
Filing Type: Form 8-K (Current Report)
Date of Report: December 8, 2009
Event: Entry into a Material Definitive Agreement regarding a new credit facility.
Key Financial Metrics
This filing reports on a refinancing transaction rather than operational performance metrics. Specific revenue, profit, or cash flow figures are not provided in this document.
- New Credit Facility Size: $450 million total.
- Structure: $200 million secured term loan and $250 million secured revolving credit facility.
- Term: Three years.
- Outstanding Balance at Closing: $200 million (term loan); $0 (revolver).
- Pricing: 3.25% to 4.00% over LIBOR (subject to leverage levels) with a 1.5% LIBOR floor.
- Security: Secured facility (previously unsecured).
Material Changes Versus Prior Period
The Company replaced its existing $450 million unsecured credit facility (dated November 21, 2006) with a new secured facility.
- Security Status: Changed from unsecured to secured.
- Use of Proceeds: Initial proceeds were used to repay outstanding balances under the Existing Facility.
- Guarantors: The Company, along with subsidiaries USI II, LLC and YSI XXIX, L.P., serve as guarantors.
Guidance, Risks, and Covenants
The filing outlines specific financial covenants and risks associated with the new agreement:
- Financial Covenants: The agreement requires compliance with liquidity and net worth tests.
- Distribution Limitations: The ability to borrow is subject to covenants that limit distributions to shareholders.
- Re-borrowing Restriction: Principal amounts repaid on term loans may not be re-borrowed.
- Events of Default: Loans may be accelerated upon failure to pay amounts due or filing of bankruptcy proceedings.
- Management Commentary: The filing incorporates the full terms of the Credit Agreement by reference (Exhibit 10.1) and includes a press release (Exhibit 99.1).
Investor Verification Checklist
- Verify the specific leverage ratios required to maintain the 3.25% to 4.00% pricing tier.
- Review the full text of the Amended and Restated Credit Agreement (Exhibit 10.1) for detailed liquidity and net worth test thresholds.
- Confirm the impact of the new secured status on the Company's overall debt profile and collateral requirements.
- Assess how the limitation on shareholder distributions affects future dividend policies.