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. (the "Company") on May 22, 2018. The filing discloses the entry into a material definitive agreement and the creation of a direct financial obligation.
Key Financial Metrics and Transaction Details
On May 22, 2018, the Company and its subsidiary, Rexford Industrial Realty, L.P. (the "Borrower"), entered into a senior unsecured term loan facility with Capital One, National Association, and BB&T Capital Markets.
- Facility Size: $150 million aggregate borrowings.
- Drawdown: The full $150 million was borrowed at closing.
- Use of Proceeds: Partial paydown of the unsecured revolving credit facility, funding acquisitions, and general corporate purposes.
- Maturity Date: May 22, 2025.
- Interest Rate: LIBOR plus a margin of 1.50% to 2.20% or Base Rate plus a margin of 0.50% to 1.20%, based on the Leverage Ratio. Rates may adjust if an additional investment-grade rating is obtained.
- Prepayment Premium: 2.00% if prepaid before May 22, 2019; 1.00% if prepaid between May 22, 2019, and May 22, 2020.
- Incremental Capacity: Up to $100 million in additional term loans permitted subject to conditions.
Material Changes and Covenants
The filing does not provide comparative financial data (revenue, profit, cash flow) for the period. The primary material change is the addition of $150 million in unsecured term debt. The Credit Agreement includes the following financial covenants:
- Total indebtedness to total asset value: Not more than 60%.
- Total secured debt to total asset value: Not more than 45%.
- Total secured recourse debt to total asset value: 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: At least 1.50 to 1.0.
- Total unsecured debt to total unencumbered asset value: Not more than 60%.
- Unencumbered NOI to unsecured interest expense: At least 1.75 to 1.0.
Outlook, Risks, and Contingencies
The filing does not contain forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard events of default associated with the Credit Agreement. Events of default include payment defaults, covenant breaches, cross-defaults, and insolvency. If an event of default occurs, all outstanding principal and accrued interest may be declared immediately due and payable.
Key Facts for Investor Verification
- Verify the impact of the $150 million drawdown on the Company's overall leverage ratio and compliance with the 60% total indebtedness covenant.
- Confirm the specific amount of the unsecured revolving credit facility paydown and the remaining capacity on that facility.
- Monitor the Company's tangible net worth to ensure it remains above the $760.7 million threshold plus applicable equity proceeds.
- Review the Company's current credit ratings (currently Fitch investment grade) to assess potential for rate adjustments if an additional rating is obtained.
- Check for any subsequent filings regarding the use of proceeds for acquisitions.