8-KMaterial AgreementsFinancial EventsExhibits & Filings

EQUITY RESIDENTIAL 8-K Report, Material Agreement (Mar 5, 2007)

Filed March 5, 2007For Securities:EQR

Summary

This Form 8-K filing by Equity Residential (EQR) reports on a material definitive agreement related to its operating partnership, ERP Operating Limited Partnership. On February 28, 2007, the Operating Partnership entered into a new $1.5 billion unsecured revolving credit facility, significantly increasing its borrowing capacity from the prior $1.0 billion facility. This new facility matures in February 2012 and provides the flexibility to increase borrowings up to $2.0 billion. The primary purpose of this announcement is to inform investors of the strengthened liquidity position and enhanced financial flexibility for ERP Operating Limited Partnership, with Equity Residential continuing as a guarantor. The increased credit line offers greater capacity for potential future investments, operational needs, or debt management, which are crucial considerations for equity investors in a real estate investment trust (REIT).

Key Highlights

  • 1ERP Operating Limited Partnership entered into a new $1.5 billion unsecured revolving credit agreement on February 28, 2007.
  • 2This new credit facility replaces a prior $1.0 billion facility.
  • 3The maturity date for the new credit facility is February 28, 2012.
  • 4The Operating Partnership has the option to increase the facility size up to $2.0 billion.
  • 5Equity Residential remains a guarantor of the Operating Partnership's obligations under the new credit facility.
  • 6The interest rate is generally based on LIBOR plus a spread that varies with the Operating Partnership's credit rating.
  • 7An annual facility fee of 10 basis points (currently) is also applicable.

Frequently Asked Questions

The main purpose of this filing is to report the entry into a material definitive agreement, specifically a new $1.5 billion unsecured revolving credit facility by ERP Operating Limited Partnership, the operating entity of Equity Residential.

The new, larger credit facility significantly enhances Equity Residential's financial flexibility by providing increased access to capital. This allows for greater capacity to fund operations, pursue acquisitions, manage existing debt, and respond to market opportunities.

The key terms include a principal amount of $1.5 billion (with potential to increase to $2.0 billion), a maturity date of February 28, 2012, and an interest rate structure based on LIBOR plus a credit-dependent spread, along with an annual facility fee.

While the credit facility is with ERP Operating Limited Partnership, Equity Residential, as the sole general partner of the Operating Partnership, remains a guarantor of its obligations under the new credit facility, indicating continued support and commitment.