Business Context and Reporting Period
Company: Healthcare Trust of America, Inc. (Note: Metadata referenced "Healthcare Realty Trust Inc," but the filing identifies the registrant as Healthcare Trust of America, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: November 22, 2010
Event: Entry into a new material definitive agreement regarding an unsecured revolving credit facility.
Key Financial Metrics and Debt Structure
This filing details the creation of a direct financial obligation rather than reporting periodic operating results. Key metrics include:
- New Credit Facility: $275,000,000 unsecured revolving credit facility.
- Expansion Option: Capacity to increase the facility by up to $225,000,000, for a total potential principal of $500,000,000.
- Term: Three years.
- Interest Rates:
- Base Rate Loans: Prime, Fed Funds + 0.5%, or Adjusted LIBO + 1.0%, plus a margin of 1.50% to 2.50% based on leverage.
- LIBO Loans: Adjusted LIBO plus a margin of 2.50% to 3.50% based on leverage.
- Unused Commitment Fees: 0.375% per annum if usage exceeds 50% of commitments; 0.50% per annum if usage is below 50%.
- Letters of Credit/Swingline Loans: Up to $27,500,000 for letters of credit and $15,000,000 for swingline loans.
Material Changes Versus Prior Period
The company terminated a previous unsecured revolving credit facility dated October 13, 2010, which had a maximum principal amount of $200,000,000.
- Termination Fee: The company paid commitment fees of $111,111.11 upon termination of the prior facility.
- Outstanding Balance: There were no amounts outstanding under the terminated facility at the time of termination.
- Net Change: The new facility increases the maximum available credit capacity by $75,000,000 compared to the terminated facility (excluding the expansion option).
Guidance, Outlook, and Risks
Management Commentary and Use of Proceeds: Proceeds from the new facility may be used for working capital needs, general corporate purposes, permitted acquisitions, and repayment of debt.
Covenants and Restrictions: The Credit Agreement includes standard affirmative and negative covenants, including:
- Limitations on the incurrence of additional debt by the company, its Operating Partnership, and subsidiaries owning unencumbered assets.
- Limitations on the nature of the Operating Partnership's business.
- Limitations on distributions by the Operating Partnership and its subsidiaries owning unencumbered assets.
Guarantees: Obligations under the Credit Agreement are guaranteed by Healthcare Trust of America, Inc. and certain subsidiaries of the Operating Partnership.
Financial Performance: The filing text does not provide revenue, profit, cash flow, or margin data for the reporting period.
Investor Verification Checklist
- Verify the current leverage ratio to determine the applicable interest rate margin (1.50%-2.50% or 2.50%-3.50%).
- Review the specific loan-to-cost, loan-to-value, and debt service coverage ratios that determine the actual available credit amount.
- Confirm the status of the $225,000,000 expansion option and whether existing or new lenders have committed to it.
- Examine the specific limitations on distributions imposed by the new covenants to assess impact on dividend policy.
- Review the full text of the Credit Agreement (Exhibit 10.1) for detailed default provisions and financial maintenance requirements.