Entry into a Material Definitive Agreement.
On December 1
, 2020, Apartment Investment and Management Company, a Maryland corporation (“Aimco”), AIMCO OP L.P., a Delaware limited partnership (“Aimco OP”), and certain subsidiaries of Aimco OP (the “Collateral Pool Loan Parties,” and, collectively with Aimco and Aimco OP, the “Loan Parties”) entered into a credit agreement (the “Credit Agreement”) with the lenders from time to time party thereto and PNC Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), swingline loan lender and letter of credit issuing lender.
The Credit Agreement provides for a new $150
secured revolving credit facility (the “Revolving Credit Facility”), including a $20,000,000 swingline loan
and a $30,000,000 letter of credit
Aimco OP may from time to time request incremental commitments under the Revolving Credit Facility in an aggregate principal amount of $300,000,000, subject to the satisfaction of customary conditions, provided that any proposed incremental lender offered or approached to provide all or a portion of any incremental commitments may elect or decline, in its sole discretion, to provide such incremental commitments. The commitments under the Revolving Credit Facility expire on December [1
], 2023, but may be extended at the option of the Aimco OP by up to two twelve-month periods, subject to the satisfaction of customary conditions. The proceeds of loans made under the Revolving Credit Facility may be used only for working capital, general corporate purposes, including investments permitted under the Credit Agreement, to refinance indebtedness of any Loan Parties or subsidiaries of any Loan Parties, and as otherwise permitted by applicable law and the organizational documents of the Loan Parties.
The obligations of the Loan Parties under the Credit Agreement and the other loan documents are secured by mortgages or deeds of trust on certain parcels of real estate owned by the Collateral Pool Loan Parties (the “Collateral Pool Properties”). After giving effect to any borrowing of revolving loans or swingline loans or the issuance of any letter of credit under the Revolving Credit Facility, the outstanding amount of revolving loans and swingline loans and the aggregate amount available to be drawn under all outstanding letters of credit issued under the Revolving Credit Facility (collectively, the “Revolving Facility Usage”) may not exceed 55% of the “as is” values of the Collateral Pool Properties, as determined by the most recently delivered appraisals commissioned, reviewed and approved by the Administrative Agent (the “Borrowing Base Amount”).
Revolving loans (other than swingline loans) made under the Revolving Credit Facility will bear interest, at the borrowers’ option, at a per annum rate equal to (a) LIBOR plus a margin of 2.00% or (b) a base rate plus a margin of 1.00%. Swingline loans made under the Revolving Credit Facility will bear interest at a per annum rate equal to the base rate plus a margin of 1.00%. The base rate is defined as a fluctuating per annum rate of interest equal to the highest of (x) the overnight bank funding rate as reported by the Federal Reserve Bank of New York, plus 0.5%, (y) PNC Bank, National Association’s prime rate and
LIBOR plus 1.00%. In connection with the issuance of letters of credit under the Revolving Credit Facility, the borrowers are required to pay (i) a fee to the Administrative Agent for the ratable account of the lenders equal to (A) LIBOR plus a margin of 2.00% times (B) the daily amount available to be drawn under each such letter of credit and (ii) a
issuance fee to the issuing lender for its own account equal to (A) 0.125% times (B) the face amount of each such letter of credit. In addition, the borrowers will pay an unused commitment fee equal to the Revolving Facility Usage (computed to exclude therefrom the full amount of the outstanding swingline loans) times (1) 0.25% per annum if the Revolving Facility Usage (computed to exclude therefrom the full amount of the outstanding swingline loans) is less than or equal to 50% of the aggregate commitments under the Revolving Credit Facility then in effect, or (2) 0.20% per annum if the Revolving Facility Usage (computed to exclude therefrom the full amount of the outstanding swingline loans) is greater than 50% of the aggregate commitments under the Revolving Credit Facility then in effect. The Credit Agreement contains customary provisions for the replacement of LIBOR with an alternative benchmark interest rate (plus, if applicable, a spread adjustment) in the event that the London interbank offered rate is no longer available or in certain other circumstances.
Aimco OP may terminate or, from time to time, reduce the aggregate amount of commitments under the Revolving Credit Facility; provided that no such termination or reduction of commitments shall be permitted if, after giving effect thereto and to any prepayments of revolving loans made at such time, the Revolving Facility Usage would exceed the aggregate commitments under the Revolving Credit Facility. The borrowers may prepay revolving loans from time to time without premium or penalty (except for customary compensation for