Rexford Industrial Realty, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Rexford Industrial Realty, Inc. on August 19, 2014. The report details the creation of a direct financial obligation through the execution of forward-starting interest rate swap transactions.
Key Financial Metrics and Obligations
The filing does not provide revenue, profit, cash flow, or margin data. The primary financial metric disclosed relates to debt hedging:
- Total Notional Amount: $100 million of outstanding debt under the Company's Credit Facility.
- Counterparties: PNC Bank, National Association and US Bank National Association.
- Underlying Debt: Floating interest rate based on LIBOR under the Amended and Restated Credit Agreement dated June 11, 2014.
Material Changes and Transaction Details
The Company entered into two interest rate swaps to mitigate floating rate risk. The specific terms are as follows:
| Swap Counterparty | Notional Amount | Effective Date | Maturity Date | Fixed Rate |
|---|---|---|---|---|
| PNC Bank | $50 million | August 14, 2015 | December 14, 2018 | 1.79% |
| US Bank | $50 million | February 15, 2016 | December 14, 2018 | 2.005% |
Under these agreements, the Company will make monthly fixed rate payments, while the counterparties will make monthly floating rate payments based on LIBOR. These transactions effectively fix the annual interest rate on the notional amounts, subject to an applicable margin under the Credit Facility.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future performance, or a discussion of general risks beyond the specific hedging activity. The primary purpose of the transaction is risk mitigation regarding interest rate fluctuations on the Company's debt.
Key Facts for Investor Verification
- Verify the current LIBOR rate and the applicable margin under the Credit Facility to determine the total effective interest cost.
- Confirm the status of the $100 million debt obligation under the Credit Facility as of the swap effective dates.
- Review the Credit Agreement dated June 11, 2014, for details on the variable margin added to the fixed swap rates.
- Note that the swaps are forward-starting, meaning the fixed rate protection does not begin until August 2015 and February 2016.