8-KMaterial AgreementsFinancial EventsExhibits & Filings

REALTY INCOME CORP 8-K Report, Material Agreement (Jul 2, 2015)

Filed July 2, 2015For Securities:O

Summary

Realty Income Corporation (O) has filed an 8-K report announcing the entry into a new Credit Agreement on June 30, 2015. This new agreement replaces the company's existing $1.5 billion revolving credit facility with a larger $2.0 billion senior unsecured revolving credit facility, maturing on June 30, 2019. Additionally, the company has secured a $250 million senior unsecured delayed draw term loan facility, available until December 30, 2015, and maturing on June 30, 2020. This expansion of its credit facilities indicates Realty Income's proactive approach to managing its capital structure and supporting future growth initiatives. The new facilities offer flexibility and provide access to a significant amount of capital at competitive terms, reflecting the company's strong credit standing. Investors should note the interest rates are tied to LIBOR or Base Rate plus an applicable margin, which is influenced by the company's credit ratings, with initial margins set at 0.90% for the revolving facility and 0.95% for the term loan.

Key Highlights

  • 1Realty Income entered into a new Credit Agreement on June 30, 2015.
  • 2The new agreement establishes a $2.0 billion senior unsecured revolving credit facility, replacing the previous $1.5 billion facility.
  • 3The revolving credit facility matures on June 30, 2019, with an option for extension.
  • 4A $250 million senior unsecured delayed draw term loan facility has also been established, maturing June 30, 2020.
  • 5Borrowings are subject to interest based on LIBOR or Base Rate plus an applicable margin determined by credit ratings.
  • 6The initial applicable margin for the revolving credit facility is 0.90% for LIBOR loans.
  • 7The initial applicable commitment fee for the revolving credit facility is 0.15%.

Frequently Asked Questions

This 8-K filing announces Realty Income Corporation's entry into a new, material definitive agreement, specifically a Credit Agreement, which expands and modernizes its credit facilities.

The new Credit Agreement provides a $2.0 billion senior unsecured revolving credit facility, which is an increase from the company's previous $1.5 billion revolving credit facility. It also has a defined maturity date of June 30, 2019, with potential for extension.

Borrowings under both the revolving credit facility and the delayed draw term loan will bear interest at either the LIBOR rate or the Base Rate, plus an Applicable Margin. This margin is based on Realty Income's credit ratings. Initially, the margin is 0.90% for LIBOR loans under the revolving facility and 0.95% for LIBOR loans under the term loan. A commitment fee of 0.15% is also payable on the unused portion of the revolving credit facility.

The $250 million senior unsecured delayed draw term loan facility provides Realty Income with the flexibility to borrow funds for specific periods. The company can request up to four borrowings under this facility between June 30, 2015, and December 30, 2015, with the loan maturing on June 30, 2020.