Highlands REIT, Inc. Announces Third Amendment to Credit Agreement
November 12, 2020 at 02:54 pm
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On November 6, 2020, Highlands REIT, Inc. entered into a Third Amendment to Credit Agreement that amends that certain Credit Agreement, dated February 15, 2019 by and between the Company, as borrower, and certain of its subsidiaries, as guarantors, The Huntington National Bank, individually and as administrative agent, issuing lender, lead arranger, book manager and syndication agent, and the other lenders thereunder. As of September 30, 2020, the Company did not expect to be in compliance with the minimum fixed charge coverage ratio and the minimum consolidated tangible net worth covenants applicable under the Credit Agreement. As a result, the Third Amendment, among other things, waived the Company’s obligation to comply with the minimum fixed charge coverage ratio and the minimum consolidated tangible net worth covenants under the Credit Agreement for the period from July 1, 2020 to December 31, 2020, restricted the Company from drawing on the Revolving Credit Loan in amounts in excess of $20,000,000 until the Company is in compliance with all such covenants and prohibited the Company from making distributions during the period from July 1, 2020 to December 31, 2020, provided, that as long as no default under the Credit Agreement exists, the Company may purchase or redeem equity interests in the Company in an amount not to exceed $20,000,000. Additionally, because the Company no longer needed the Term Loan due to the Company’s capital resources and anticipated capital needs, the Company “right-sized” the credit facility under Credit Agreement by eliminating the Term Loan previously available under the Credit Agreement, and, in connection with the execution of the Third Amendment, the Company borrowed sufficient funds under the Revolving Credit Loan to repay all of its obligations under the Term Loan.
Highlands REIT, Inc. is a self-advised and self-administered real estate investment trust (REIT). The Company owns and manages substantially all of the non-core investment properties. The Company operates through two segments: multi-family and other. The Company's portfolio of investment properties consisted of 13 multi-family, three retail, one office and two industrial properties, one correctional facility and one parcel of unimproved land, which are all located in the United States. The Company's properties include 1620 Central, Buerger Brothers Lofts, Chamber Lofts, Kenilworth Court, Tennyson44, The Detroit and Detroit Terraces, The Lafayette, The Locale, The Muse, The Sterling, Hudson Correctional Facility, Market at Hilliard, The Q Lofts, Sherman Plaza and others.