Item 2.03 Creation of Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant
On July 19, 2021, Retail Properties of America, Inc. (the "Company") entered
into the Second Amendment (the "Second Amendment") to its term loan agreement,
dated as of July 17, 2019 (as amended by that certain First Amendment to such
Term Loan Agreement dated as of May 4, 2020 and as may be further amended,
restated, supplemented or otherwise modified from time to time, collectively,
the "Existing Loan Agreement"), governing a seven-year $150,000,000 unsecured
term loan (the "7 Year Term Loan") and a five-year $120,000,000 unsecured term
loan that are currently outstanding. The Second Amendment provides, among other
things, (i) that borrowings under the 7 Year Term Loan bear interest at a rate
per annum equal to London Interbank Offered Rate ("LIBOR"), adjusted based on
applicable reserve percentages established by the Federal Reserve, or the
alternate base rate, in each case, plus a margin of between 1.20% and 1.70%
(compared to 1.50% to 2.20% under the Existing Loan Agreement) based on the
Company's leverage ratio as calculated under the Existing Loan Agreement, or a
margin of between 0.75% and 1.60% (compared to 1.35% to 2.25% under the Existing
Loan Agreement) based on a pricing grid that is based on the Company's
investment grade credit, respectively, and (ii) for the incorporation of a
sustainability metric, based on targeted greenhouse gas emission reductions,
which permits the Company to reduce the applicable grid-based spread by one
(1) basis point annually upon attainment. The Company may elect to irrevocably
convert to the investment grade credit rating pricing grid at any time as long
as it maintains an investment grade credit rating. Interest on amounts
outstanding under the 7 Year Term Loan is payable monthly. The five-year
unsecured term loan matures on July 17, 2024 and the 7 Year Term Loan matures on
July 17, 2026, consistent with the terms of the Existing Loan Agreement.
The Second Amendment was negotiated by the Company in the ordinary course of
business prior to the Company's execution of the Agreement and Plan of Merger
(the "Merger Agreement") with Kite Realty Group Trust ("Kite") and KRG Oak, LLC,
a wholly owned subsidiary of Kite, on July 18, 2021 and was permitted to be
entered into pursuant to the terms of the Merger Agreement.
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