8-KMaterial AgreementsFinancial EventsExhibits & Filings

CBRE GROUP, INC. 8-K Report, Material Agreement (Nov 1, 2017)

Filed November 1, 2017For Securities:CBRE

Summary

This 8-K filing by CBRE Group, Inc. (CBRE) on November 1, 2017, announces the entry into a new, substantial Credit Agreement, replacing its previous facility. The new agreement provides a total borrowing capacity of $3.55 billion, comprising a $750 million senior unsecured delayed draw term loan facility and a $2.8 billion senior unsecured revolving credit facility. This strategic move aims to enhance the company's financial flexibility and optimize its capital structure. Of significant note, the company immediately drew $200 million on the term loan facility and $83 million on the revolving facility, using these proceeds along with cash on hand to fully repay its existing credit agreement. The new facility features competitive interest rates and fees that are tiered based on CBRE's credit ratings. It also includes specific sub-facilities for multicurrency and UK borrowings, underscoring the company's global operational scope. The agreement is guaranteed by the company and its material U.S. subsidiaries, with specific foreign subsidiaries also providing guarantees for foreign obligations.

Key Highlights

  • 1CBRE Group, Inc. entered into a new Credit Agreement on October 31, 2017, replacing its previous credit facility.
  • 2The new Credit Agreement provides a total borrowing capacity of $3.55 billion, consisting of a $750 million delayed draw term loan facility and a $2.8 billion revolving credit facility.
  • 3The company made initial borrowings of $200 million under the term loan and $83 million under the revolving credit facility on the closing date.
  • 4Proceeds from the initial borrowings, along with existing cash, were used to fully repay all outstanding loans under the previous credit agreement.
  • 5The Credit Agreement includes provisions for multicurrency borrowings ($200 million sub-facility) and UK revolving loans ($300 million sub-facility).
  • 6Interest rates and fees are variable and depend on CBRE's credit ratings, with tiers provided for different rating levels.
  • 7The agreement includes customary financial covenants, including maximum leverage and minimum interest coverage ratios, and is guaranteed by the company and its material U.S. subsidiaries.

Frequently Asked Questions

The new Credit Agreement provides a total borrowing capacity of $3.55 billion, which includes a $750 million senior unsecured delayed draw term loan facility and a $2.8 billion senior unsecured revolving credit facility.

On October 31, 2017, CBRE made initial borrowings of $200 million under the term loan facility and $83 million under the revolving credit facility. These funds, combined with cash on hand, were used to fully repay all outstanding obligations under the previous credit agreement.

The revolving credit facility has a total capacity of $2.8 billion and includes a $200 million sub-facility for multicurrency revolving borrowings and a $300 million sub-facility for UK revolving loans. It also allows for $200 million in letters of credit and $50 million in swingline loans for short-term borrowings by the New Zealand Borrower.

Yes, the Credit Agreement includes financial covenants that require CBRE and its subsidiaries to maintain a maximum leverage ratio and a minimum interest coverage ratio. It also contains other customary affirmative and negative covenants.