UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 4, 2023, Sabra Health Care Limited Partnership, of which Sabra Health Care REIT, Inc. (“Sabra”) is the sole general partner (the “Operating Partnership”), and Sabra Canadian Holdings, LLC, also a wholly owned subsidiary of Sabra (together, the “Borrowers”), and the other parties thereto entered into a sixth amended and restated unsecured credit agreement (the “Credit Agreement”) with certain lenders as set forth therein; Bank of America, N.A., as Administrative Agent and L/C Issuer; Citizens Bank, National Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents and L/C Issuers; The Bank of Nova Scotia, Fifth Third Bank, JPMorgan Chase Bank, N.A., Keybank National Association, Mizuho Bank, Ltd., and Truist Bank, as Co-Documentation Agents; BofA Securities, Inc., as Joint Lead Arranger and Sole Bookrunner; and Citizens Bank, National Association, Crédit Agricole Corporate and Investment Bank and Wells Fargo Securities, LLC, as Joint Lead Arrangers. The Credit Agreement amends and restates the fifth amended and restated unsecured credit agreement (as amended, the “Prior Credit Agreement”) that the Borrowers entered into on September 9, 2019. Capitalized terms used but not defined in this Item 1.01 have the meanings set forth for such terms in the Credit Agreement.
The Credit Agreement includes a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), a $430.0 million U.S. dollar term loan and a CAD $150.0 million Canadian dollar term loan (collectively, the “Term Loans”). The Prior Credit Agreement included a $1.0 billion revolving credit facility, $1.1 billion in U.S. dollar term loans and a CAD $125.0 million Canadian dollar term loan. Further, up to $350.0 million of the Revolving Credit Facility may be used for borrowings in certain foreign currencies (from $175.0 million in the Prior Credit Agreement). The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion (unchanged from the Prior Credit Agreement), subject to terms and conditions.
The Revolving Credit Facility has a maturity date of January 4, 2027, and includes two six-month extension options. The U.S. dollar Term Loan has a maturity date of January 4, 2028, and the Canadian dollar Term Loan has a maturity date of January 4, 2028.
Borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) SOFR or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, and (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0% (the “Base Rate”). The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings, as defined in the Credit Agreement, and will range from 0.775% to 1.450% per annum for SOFR based borrowings and 0.00% to 0.450% per annum for borrowings at the Base Rate. In addition, the Operating Partnership pays a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Revolving Credit Facility regardless of amounts outstanding thereunder.
The U.S. dollar Term Loans bear interest on the outstanding principal amount at a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) SOFR or (b) the Base Rate. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings and will range from 0.850% to 1.650% per annum for SOFR based borrowings and 0.00% to 0.650% per annum for borrowings at the Base Rate. The Canadian dollar Term Loan bears interest on the outstanding principal amount at a rate equal to the Canadian Dollar Offered Rate (“CDOR”) plus an interest margin that will range from 0.850% to 1.650% depending on the Debt Ratings.
The obligations of the Borrowers under the Credit Agreement are guaranteed by Sabra and certain subsidiaries of Sabra.
The Credit Agreement contains customary covenants that include restrictions or limitations on the ability to pay dividends, incur additional indebtedness, engage in non-healthcare related business activities, enter into transactions with affiliates and sell or otherwise transfer certain assets as well as customary events of default. The Credit Agreement also requires Sabra, through the Operating Partnership, to comply with specified financial covenants, which include a maximum total leverage ratio, a maximum secured debt leverage ratio, a minimum fixed charge coverage ratio, a maximum unsecured leverage ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio.
The Credit Agreement is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by this reference. This description of the material terms of the Credit Agreement is qualified in its entirety by reference to such exhibit.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure in Item 1.01 is incorporated herein by reference into this Item 2.03.
| Item 8.01 | Other Events. |
On January 5, 2023, Sabra issued a press release regarding the Credit Agreement. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated in this Item 8.01 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SABRA HEALTH CARE REIT, INC. | ||||||
| Date: January 5, 2023 | /s/ Michael Costa | |||||
| Name: | Michael Costa | |||||
| Title: | Chief Financial Officer, Secretary and Executive Vice President | |||||