Business Context and Reporting Period
Company: Four Corners Property Trust, Inc. (FCPT)
Filing Type: Form 8-K (Current Report)
Date of Report: June 4, 2021
Event: Entry into a Material Definitive Agreement (Second Amended and Restated Revolving Credit and Term Loan Agreement).
Key Financial Metrics and Debt Structure
This filing details a refinancing of the Company's credit facilities. The filing does not provide revenue, profit, cash flow, or margin data for the reporting period.
| Facility Type | Principal Amount | Maturity Date |
|---|---|---|
| Revolving Credit Facility | $250.0 million | November 9, 2025 |
| Term Loan A-1 Facility | $150.0 million | November 9, 2025 |
| Term Loan A-2 Facility | $100.0 million | November 9, 2026 |
| Non-Extended Term Loan A-2 Facility | $50.0 million | November 9, 2023 |
| Non-Extended Term Loan A-3 Facility | $100.0 million | March 9, 2024 |
| Total Term Loan Facility | $400.0 million | Various |
Interest Rates: LIBOR plus a margin ranging from 0.725% to 1.65% depending on the facility and leverage ratio/rating. Base rate options are also available.
Accordion Feature: Capacity to increase commitments by up to an additional $350.0 million.
Guaranty: Obligations are guaranteed on a joint and several basis by the Company and Four Corners GP, LLC.
Material Changes Versus Prior Period
The new agreement amends and restates in its entirety the existing Amended and Restated Revolving Credit and Term Loan Agreement dated October 2, 2017. Key structural changes include:
- Extension of the revolving credit facility maturity to November 9, 2025.
- Restructuring of term loans into four distinct tranches with staggered maturity dates ranging from 2023 to 2026.
- Inclusion of LIBOR replacement provisions permitting the use of the Secured Overnight Financing Rate (SOFR).
- Option to extend the revolving credit facility maturity by up to one year upon payment of a 0.0625% extension fee.
Guidance, Covenants, and Risks
Financial Covenants: The Borrower is subject to the following financial maintenance covenants:
- Total Indebtedness to Consolidated Capitalization Value: Not to exceed 60%.
- Mortgage-secured leverage ratio: Not to exceed 40%.
- Total secured recourse indebtedness: Not to exceed 5% of Consolidated Capitalization Value.
- Minimum fixed charge coverage ratio: 1.50 to 1.00.
- Maximum unencumbered leverage ratio: Not to exceed 60%.
- Minimum unencumbered interest coverage ratio: Not less than 1.75 to 1.00.
- Minimum consolidated tangible net worth requirement.
Risks and Contingencies: Events of default include payment defaults, breach of covenants, cross acceleration, bankruptcy, and change of control. An event of default may limit the Company's ability to make distributions and result in the acceleration of repayment obligations. The filing notes that the press release information is "furnished" and not "filed" for purposes of Section 18 of the Exchange Act.
Investor Verification Checklist
- Verify the specific leverage ratio and credit rating of the Company to determine the applicable interest rate margin and facility fees.
- Review the full text of the Loan Agreement (Exhibit 10.1) for detailed definitions of "Consolidated Capitalization Value" and other covenant metrics.
- Confirm the status of the "Non-Extended" term loan tranches maturing in 2023 and 2024 to assess near-term liquidity requirements.
- Monitor the Company's ability to maintain REIT status as required by the affirmative covenants.
- Check for any subsequent filings regarding the utilization of the accordion feature to increase debt capacity.