8-KMaterial AgreementsFinancial EventsExhibits & Filings

REALTY INCOME CORP 8-K Report, Material Agreement (Aug 28, 2013)

Filed August 28, 2013For Securities:O

Summary

Realty Income Corporation (O) filed an 8-K on August 27, 2013, to report a material definitive agreement: the Second Amendment to its Credit Agreement. This amendment, dated August 19, 2013, and executed on August 27, 2013, involves key modifications to the Company's existing credit facility. For investors, the most significant aspects of this amendment relate to changes in how the Company calculates asset values and the inclusion of properties held by certain subsidiaries. Specifically, the definition of "Gross Asset Value" was modified to alter how certain property acquisitions are calculated, and the definition of "Unencumbered Asset" was expanded to encompass properties held by Guarantors that are not wholly owned by Realty Income. Furthermore, the amendment mandates that certain non-wholly owned subsidiaries must become guarantors under specific conditions. These changes could impact the Company's leverage ratios and overall financial flexibility.

Key Highlights

  • 1Realty Income Corporation entered into a Second Amendment to its Credit Agreement on August 27, 2013.
  • 2The amendment modifies the definition of 'Gross Asset Value,' impacting the calculation of certain property acquisitions.
  • 3The definition of 'Unencumbered Asset' is broadened to include properties held by Guarantors that are not wholly owned subsidiaries.
  • 4Certain subsidiaries not wholly owned by the Company will be required to become guarantors under specific conditions.
  • 5These changes are designed to enhance the Company's financial flexibility and reporting mechanisms.
  • 6The filing incorporates the Second Amendment document as an exhibit, providing detailed terms.

Frequently Asked Questions

This 8-K filing reports the execution of a Second Amendment to Realty Income Corporation's existing Credit Agreement, which is considered a material definitive agreement.

The modification to 'Gross Asset Value' alters how certain property acquisitions are accounted for. This could potentially impact reported asset values and financial ratios, affecting how the company's financial health is perceived.

Expanding the 'Unencumbered Asset' definition to include properties from not wholly owned subsidiaries suggests an effort to provide a more comprehensive view of the assets available as collateral or for financial covenant calculations, potentially increasing borrowing capacity or flexibility.

Requiring non-wholly owned subsidiaries to become guarantors, under certain conditions, likely strengthens the Credit Agreement by securing additional recourse for lenders. This can provide greater financial security for the lender and potentially improve the overall credit standing of Realty Income.