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. (REXR) on July 16, 2019. The filing discloses the entry into a Material Definitive Agreement regarding a private placement of debt securities by the Company's operating partnership, Rexford Industrial Realty, L.P.
Key Financial Metrics and Transaction Details
The Company completed the issuance of $100.0 million in unsecured guaranteed senior notes. The capital structure of this issuance is as follows:
- Series 2019A Notes: $25.0 million principal amount, 3.88% interest rate, due July 16, 2029.
- Series 2019B Notes: $75.0 million principal amount, 4.03% interest rate, due July 16, 2034.
Interest is payable semiannually beginning January 16, 2020. The filing does not provide specific revenue, profit, cash flow, or margin data for the reporting period, as this is a transactional filing rather than a periodic financial report.
Material Changes and Covenants
The Note Purchase Agreement establishes specific financial covenants that the Operating Partnership must maintain:
- Total indebtedness to total asset value ratio: Not more than 60%.
- Total secured debt to total asset value ratio: Not more than 40%.
- Total secured recourse debt to total asset value ratio: Not more than 15%.
- Minimum tangible net worth: At least $760,740,750 plus 75% of net equity proceeds received after September 30, 2016.
- Adjusted EBITDA to fixed charges ratio: At least 1.50 to 1.0.
- Total unsecured debt to total unencumbered asset value ratio: Not more than 60%.
- Unencumbered NOI to unsecured interest expense ratio: At least 1.75 to 1.0.
The Company and certain subsidiaries fully and unconditionally guarantee the obligations under these notes.
Outlook, Use of Proceeds, and Risks
The Operating Partnership intends to use the net proceeds from the issuance to fund the acquisition of industrial properties and for general corporate purposes. The notes may be prepaid at any time in amounts not less than $2.5 million, subject to a Make-Whole Amount calculation. In the event of a Change of Control, the Company is required to offer to prepay the notes at 100% of the principal amount plus accrued interest.
Risks include standard events of default such as failure to pay principal or interest, non-compliance with covenants, or bankruptcy. The notes were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933.
Key Facts for Investor Verification
- Verify the total debt load of the Company post-issuance to ensure compliance with the 60% total indebtedness to asset value covenant.
- Confirm the specific industrial properties targeted for acquisition with the $100.0 million in proceeds.
- Review the full Note Purchase and Guarantee Agreement (Exhibit 10.1) for detailed definitions of "Change of Control" and "Make-Whole Amount."
- Monitor the Company's tangible net worth to ensure it remains above the $760.7 million threshold plus applicable equity proceeds.