INVITATION HOMES INC. : Entering a Material Definitive Agreement, Financial Statements and Supporting Documentation (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

On June 22, 2022, Invitation Homes Operating Partnership LP (the “Borrower”), a wholly owned subsidiary of Invitation Houses Inc. (the “Company”), entered into the Term Loan Agreement (the “Term Loan Agreement”) with the lenders parties thereto (the “Lenders”) and Capital One, National Association, as administrative agent. The Term Loan Agreement provides for senior unsecured term loans, with current commitments totaling $725.0 million (together, collectively, the “Term Loans”), consisting of:

    •     a $150.0 million initial term loan (the "Initial Term Loan"), which will
          mature on June 22, 2029; and



    •     up to three delayed draw term loans (the "Delayed Draw Term Loans")
          totaling $575.0 million, which will mature on June 22, 2029, which may be
          drawn during the six month period following the date of effectiveness of
          the Term Loan Agreement.

The Term Loan Agreement also includes an accordion feature providing the ability to increase the size of the Term Loans or enter into additional additional Term Loans, such that the total amount of the Term Loans, together with those Term Loans additional additional term, does not exceed at any time $950.0 millionsubject to certain limitations.

Proceeds from the original term loan and excess cash were used in a series of transactions to repay the $232.7 million main balance of the IH 2018-2 securitization maturing on June 9, 2025.

Interest Rates and Fees

Borrowings under the Term Loan Agreement bear interest, at the option of the Borrower, at a rate equal to a margin on either (a) an Adjusted Term SOFR rate determined by reference to the Term SOFR rate published by the Administrator of Term SOFR for the interest period concerned with this loan or (b) a base rate determined by reference to the greater of (1) the prime rate of the administrative agent, (2) the effective rate of the plus 0.50%, and (3) the forward SOFR benchmark rate that would be payable on that day for an adjusted forward SOFR rate loan with an interest period of one month plus 1.00%. The margin for the initial term loan and deferred draw term loans ranges from 0.15% to 1.20%, in the case of base rate loans, and from 1.15% to 2.20%, in the case of SOFR term loans. The margin on the effective date of the Term Loan Agreement is 0.25% for base rate loans and 1.25% for SOFR rate term loans. The term loan agreement also includes a sustainability component whereby term loan pricing may improve when the company achieves certain sustainability ratings, determined by an independent third-party assessment.

The borrower is also required to pay the lenders an unused fee equal to the daily unused balance of the deferred draw term loan commitments multiplied by 0.20% per annum.

Installments

The Borrower is permitted to voluntarily repay amounts outstanding under the Term Loans (a) no later than the first anniversary of closing subject to a 2.0% prepayment charge, (b) no later than on the second anniversary of closing subject to a 1.0% prepayment charge and (c) at any time thereafter without premium or penalty

Amortization

Term loans have no amortization payments required before the final maturity date.

Warranties

The obligations under the term loans are jointly and severally guaranteed by the Company and each of the other subsidiaries of the Company which holds, directly or indirectly, interests in the Borrower. These guarantees will be automatically released upon the occurrence of certain events. In addition, certain wholly-owned domestic subsidiaries of the borrower that own, directly or indirectly, unencumbered assets may be required to provide term loan security in certain circumstances, including if such subsidiary is a borrower or guarantor. another debt with recourse.

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Certain covenants and events of default

The term loans contain certain customary affirmative and negative clauses and certain events of default, pursuant to the terms of the borrower’s existing amended and restated revolving credit facility and term loan agreement. Subject to certain exceptions, these covenants restrict the ability of the Borrower and its subsidiaries to, among other things:

  •   engage in certain mergers, consolidations or liquidations;



  •   sell, lease or transfer all or substantially all of their respective assets;



  •   engage in certain transactions with affiliates;



    •     make changes to the Borrower's fiscal year or change the method of
          determining fiscal quarters;



    •     make changes in the nature of the business of the Borrower and its
          subsidiaries; and



  •   incur additional indebtedness on a pari passu basis with the Term Loans.

The Term Loan Agreement also requires the Borrower, on a consolidated basis with its subsidiaries, to maintain a maximum (i) total leverage ratio, (ii) a maximum guaranteed leverage ratio, (iii) a leverage ratio not maximum encumbrance, (iv) minimum fixed charge coverage ratio, (v) minimum unsecured interest coverage ratio and (vi) maximum secured recourse leverage ratio.

If an event of default occurs, the lenders will have the right to take various actions, including accelerating the amounts due under the term loan agreement.

The above summary of the Term Loan Agreement is qualified in its entirety by reference to the Term Loan Agreement, a copy of which is attached hereto as Schedule 10.1 and incorporated herein by reference.

From time to time, the Company has had customary commercial and/or investment banking relationships with affiliates of Capital One, National Association, The Huntington National Bank, Keybanc Capital Markets, Inc.M&T Bank, PNC Capital Markets LLC, Bank of Regions, National Association of American Banks, BMO Capital Markets Corp. and Raymond James Bankand/or some of their affiliates.

Item 9.01 Financial statements and supporting documents.

Exhibit No.       Description

10.1                Term Loan Agreement, dated as of June 22, 2022, by and among
                  Invitation Homes Operating Partnership LP, as borrower, the
                  lenders party thereto, Capital One, National Association, as
                  administrative agent and the other parties party thereto.

104               Cover Page Interactive Data File (embedded within the Inline XBRL
                  document).

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