HCP, Inc., a Maryland-based Real Estate Investment Trust,, entered into a Credit Agreement, by and among the Company, as borrower, the lenders referred to therein, and Bank of America, N.A., as administrative agent. The New Credit Agreement provides for a $2.0 billion senior unsecured revolving credit facility, replacing the Company’s prior $2.0 billion senior unsecured revolving credit facility.
Pursuant to the New Credit Agreement, the Company has the right to enter into term loans or increase the facility by an aggregate amount of up to $750 million, so long as no default or event of default is continuing and other customary conditions have been satisfied. Any such increase will be syndicated on a best efforts basis and no lender is required to increase its commitment under the New Credit Agreement to facilitate such increase. The New Credit Agreement includes sublimits of (i) up to $100 million for letters of credit, (ii) up to 10% of the facility for swingline loans, (iii) up to $1.0 billion for loans in certain alternative currencies and (iv) up to 50% of the facility for certain negotiated rate loans.
The New Credit Agreement matures on October 19, 2021, which is the fourth anniversary of the closing date. However, at its sole option, the Company may extend the maturity of the New Credit Agreement for up to two additional 6-month periods, so long as (i) no default or event of default exists at the time of the request or on the then current maturity date, (ii) the Company pays a fee equal to the product of 0.0625% multiplied by the then aggregate commitments under the facility, and (iii) other customary conditions have been satisfied.
Revolving loans outstanding under the New Credit Agreement will bear interest at a rate per annum equal to the applicable margin plus the applicable base rate or, at the Company’s option, the LIBOR, CDOR or BBSY interest rate (“Eurocurrency rate”), as applicable. Negotiated rate loans will bear interest at the rate agreed to between the Company and the applicable lender. The applicable margin ranges from 0.00% to 0.55% for base rate loans and 0.775% to 1.55% for Eurocurrency rate loans, in each case based on the senior unsecured long-term debt ratings of the Company (“Debt Ratings”). Based on the Company’s current Debt Ratings, the applicable margins for revolving loans are 1.00% for a Eurocurrency rate loan or 0.00% for a base rate loan.
The Company is also obligated to pay a facility fee on the aggregate amount of the revolving commitments (regardless of usage thereof) at a rate per annum ranging from 0.10% to 0.30% based on its senior unsecured long-term debt ratings and a fronting fee of 0.125% on alternative currency loans and letters of credit. The current applicable facility fee for the revolving loan is 0.20%.