Business Context and Reporting Period
Company: Gladstone Commercial Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: November 22, 2006
Event: Entry into a material definitive agreement and creation of a direct financial obligation.
Key Financial Metrics
This filing reports a specific financing transaction rather than periodic financial performance metrics (revenue, profit, cash flow, or margins).
| Metric | Value |
|---|---|
| Total New Debt Obligation | $14,309,000 |
| Interest Rate | 5.76% per year |
| Maturity Date | December 1, 2016 |
| Prepayment Penalty | None after September 1, 2016 |
| Collateral Properties | San Antonio, TX ($7,260,000); Arlington, TX ($4,168,000); Lexington, NC ($2,881,000) |
Material Changes
The Company entered into a long-term note payable with CIBC, Inc. for a total of $14,309,000. The proceeds from this new debt were utilized to pay down the remaining balance on the Company's existing line of credit. This transaction represents a shift from revolving credit to term debt secured by specific real estate assets.
Outlook, Risks, and Management Commentary
Management Commentary: The filing indicates a strategic refinancing move to replace existing line of credit obligations with a fixed-rate, long-term note.
Risks/Contingencies: The new debt is secured by deeds of trust on three specific properties. Failure to meet obligations could result in the loss of these collateral assets. The filing does not provide forward-looking guidance on revenue or earnings.
Investor Verification Checklist
- Verify the impact of the 5.76% interest rate on future interest expense compared to the previous line of credit rate.
- Confirm the current occupancy and lease status of the three collateral properties (San Antonio, Arlington, and Lexington).
- Review the Company's remaining liquidity and available credit facilities after paying down the line of credit.
- Check for any covenants in the new Promissory Note that may restrict future operations or capital raising.