SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive Agreement.
The disclosures contained in “Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant”
of this Current Report on Form 8-K are incorporated in this Item 1.01 by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On January 29, 2021, Ventas Realty, Limited Partnership (“Ventas Realty”), Ventas SSL Ontario II, Inc., Ventas SSL Ontario III, Inc., Ventas Canada Finance Limited, Ventas UK Finance, Inc. and Ventas Euro Finance, LLC, each of which is a direct or indirect wholly owned subsidiary of Ventas, Inc. (the “Company”), as borrowers (collectively, the “Borrowers”), and the Company, as guarantor, entered into a Third Amended and Restated Credit and Guaranty Agreement (the “New Credit Agreement”), with the lenders identified therein, Bank of America, N.A., as Administrative Agent, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as L/C Issuers. The New Credit Agreement provides for a $2.75 billion unsecured revolving credit facility (the “Revolving Credit Facility”).
The New Credit Agreement replaces the Company’s existing unsecured credit facility (which provided for a $3.0 billion unsecured revolving credit facility, a $200 million unsecured term loan facility that matured in 2018 and an $800 million unsecured term loan facility that matured in 2019) evidenced by that certain Second Amended and Restated Credit and Guaranty Agreement, dated as of April 25, 2017, by and among the Borrowers, the Company, as guarantor, the lenders identified therein, Bank of America, N.A., as Administrative Agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as Swing Line Lenders and L/C Issuers, and Bank of America, N.A., as Alternative Currency Fronting Lender (the “Existing Credit Agreement”).
Aggregate borrowing capacity under the New Credit Agreement may be increased, at the Borrowers’ option, to up to $3.75 billion by increasing the amount of the Revolving Credit Facility or by incurring additional term loans, in each case subject to the satisfaction of certain conditions set forth in the New Credit Agreement, including the receipt of additional commitments for such increase.
The Revolving Credit Facility includes sublimits of (i) up to $200 million for letters of credit, (ii) up to $700 million for loans in certain alternative currencies, (iii) up to $300 million for certain multicurrency loans and (iv) up to 50% of the facility for certain negotiated rate loans.
The Borrowers’ obligations under the New Credit Agreement are guaranteed by the Company and rank equal in right of payment with all other senior unsecured obligations of the Borrowers and the Company.
Borrowings outstanding under the New Credit Agreement bear interest at a fluctuating rate per annum equal to the applicable LIBOR for Eurocurrency rate loans and the higher of (i) the federal funds rate plus 0.50%, (ii) the Administrative Agent’s prime rate and (iii) the applicable LIBOR plus 1.0% for base rate loans, plus, in each case, a spread based on the long-term senior unsecured, non-credit enhanced debt rating of Ventas Realty (“Debt Ratings”). Negotiated rate loans pursuant to the New Credit Agreement bear interest at the rate agreed to between the relevant Borrower and the applicable lender. The Borrowers are also obligated to pay an annual facility fee on the aggregate commitments under the Revolving Credit Facility based on Ventas Realty’s Debt Ratings. Based on Ventas Realty’s current Debt Ratings, the applicable spread is 0.825% for Eurocurrency rate revolving loans and 0.00% for base rate revolving loans, and the facility fee is 15 basis points. The New Credit Agreement also includes a sustainability component whereby the Revolving Credit Facility pricing can improve upon the Company’s achievement of certain sustainability ratings. The LIBOR replacement provisions in the New Credit Agreement permit the use of rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York.
The Revolving Credit Facility matures on January 29, 2025, but may be extended, at the Borrowers’ option, for up to two additional periods of six months each, subject to the satisfaction of certain conditions set forth in the New Credit Agreement. Borrowings outstanding under the New Credit Agreement may be repaid from time to time without premium or penalty, other than customary breakage costs, if any, with respect to Eurocurrency rate loans.
Except as set forth above, the terms of the New Credit Agreement are substantially consistent with the terms of the Existing Credit Agreement. In particular, the New Credit Agreement imposes certain customary restrictions on the Borrowers, the Company and their subsidiaries, including restrictions pertaining to: (i) liens; (ii) investments; (iii) the incurrence of additional indebtedness; (iv) mergers and dissolutions; (v) certain dividend, distribution and other payments; (vi) permitted businesses; (vii) transactions with affiliates; (viii) agreements limiting certain liens; and (ix) the maintenance of certain consolidated total leverage, secured debt leverage, unsecured debt leverage and fixed charge coverage ratios and minimum consolidated adjusted net worth. The New Credit Agreement also contains customary events of default. If a default occurs and is continuing, the Borrowers may be required to repay all amounts outstanding under the New Credit Agreement.
The foregoing description of the New Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
The representations, warranties and covenants contained in the New Credit Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the New Credit Agreement are not necessarily characterizations of the actual state of facts about the Company, the Borrowers and their subsidiaries at the time they were made or otherwise and should be read only in conjunction with the other information that the Company makes publicly available in reports, statements and other documents filed with the Securities and Exchange Commission. Investors are not third-party beneficiaries of, and should not rely upon, such representations, warranties and covenants.
|Item 5.02.||Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.|
Effective February 1, 2021, Maurice Smith, President and Chief Executive Officer of Health Care Service Corporation, was appointed as an independent director to the Board of Directors of the Company.
Mr. Smith is not a party to any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K, and there are no arrangements or understandings between Mr. Smith and any other persons pursuant to which he was selected as a director. As of the time of the filing of this Current Report on Form 8-K, the Board of Directors has not determined the committees, if any, to which Mr. Smith may be appointed. Mr. Smith will participate in the compensation arrangements for non-employee directors, including receiving an initial award of shares of restricted stock upon appointment, as described in the Company’s 2020 Proxy Statement filed with the Securities & Exchange Commission on April 8, 2020.
A copy of the press release issued by the Company on February 2, 2021, announcing the appointment of Mr. Smith to the Board of Directors, is attached to this Current Report on Form 8-K as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
|10.1*||Third Amended and Restated Credit and Guaranty Agreement, dated as of January 29, 2021, among Ventas Realty, Limited Partnership, Ventas SSL Ontario II, Inc., Ventas SSL Ontario III, Inc., Ventas Canada Finance Limited, Ventas UK Finance, Inc., and Ventas Euro Finance, LLC, as Borrowers, Ventas, Inc., as Guarantor, the Lenders identified therein, Bank of America, N.A., as Administrative Agent, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as L/C Issuers.|
|99.1||Press release issued by the Company on February 2, 2021, announcing the appointment of Mr. Smith to the Board of Directors.|
|104||Cover Page Interactive Data File (formatted as inline XBRL).|
* In accordance with Item 601(a)(5) of Regulation S-K certain schedules and exhibits have not been filed. The Company hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|Date: February 2, 2021||By:||/s/ Carey S. Roberts|
Carey S. Roberts
Executive Vice President, General Counsel and Ethics & Compliance Officer