SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 16 — SUBSEQUENT EVENTS

The following events occurred subsequent to September 30, 2020:

Broadly Syndicated Loans

Subsequent to September 30, 2020, the Company settled $42.2 million of net broadly syndicated loan transactions, $28.6 million of which were traded as of September 30, 2020.

Property Disposition

Subsequent to September 30, 2020, the Company disposed of one property for an aggregate gross sales price of $7.7 million. The property disposition resulted in proceeds of $7.4 million after closing costs to CMFT Management or its affiliates and a gain of approximately $470,000. The Company has no continuing involvement with this property.

Repurchase Facilities

Subsequent to September 30, 2020, the Company received borrowings under the Repurchase Facilities in an aggregate amount of $56.2 million. Advances under the Repurchase Agreements accrue interest at per annum rates based on the one-month LIBOR, plus a spread to be determined on a case-by-case basis between Citibank or Barclays and the CMFT Lending Subs, as discussed in Note 9 — Credit Facilities, Notes Payable and Repurchase Facilities.

Termination of CCIT II Merger Agreement

Prior to the CCIT II Stockholder Approval, CCIT II received an acquisition proposal that CCIT II’s board of directors determined to be a Superior Proposal. As a result, on October 28, 2020, CCIT II terminated the CCIT II Merger Agreement in order to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal. In accordance with the termination of the CCIT II Merger Agreement, CCIT II paid to the Company a termination fee of $7.38 million and agreed to pay the amount of the Company’s expenses incurred in connection with the CCIT II Merger Agreement up to $3.69 million.

Amendment to CCIT III Merger Agreement

On November 3, 2020, the parties to the CCIT III Merger Agreement entered into Amendment No. 1 to Agreement and Plan of Merger (the “Amendment”), pursuant to which (i) the CCIT III Merger Agreement was amended to increase the exchange ratio set forth therein from 1.093 to 1.098 shares of the Company’s common stock for each share of CCIT III Common Stock (as each term is defined in the CCIT III Merger Agreement) (with such ratio subject to adjustments in accordance with the terms and conditions of the CCIT III Merger Agreement) and (ii) CCIT III irrevocably waived its right to terminate the Merger Agreement set forth in Section 9.1(c)(iii) in relation to the amendment on October 29, 2020 of the CCPT V Merger Agreement to increase the exchange ratio set forth therein.

Amendments to CCPT V Merger Agreement

On October 22, 2020, the parties to the CCPT V Merger Agreement entered into the First Amendment to Agreement and Plan of Merger, pursuant to which CCPT V was granted an extension under limited circumstances to timely deliver a CCPT V Change Notice (as defined in the CCPT V Merger Agreement) in order for the Go Shop Termination Payment (as defined in the CCPT V Merger Agreement) to be applicable in those circumstances.

On October 24, 2020, the parties to the CCPT V Merger Agreement entered into the Second Amendment to Agreement and Plan of Merger, pursuant to which the CCPT V was granted another extension under limited circumstances to timely deliver a CCPT V Change Notice in order for the Go Shop Termination Payment to be applicable in those circumstances.

On October 29, 2020, the parties to the CCPT V Merger Agreement entered into Amendment No. 3 to Agreement and Plan of Merger, pursuant to which the CCPT V Merger Agreement was amended to (i) increase the exchange ratio set forth therein from 2.691 to 2.892 shares of the Company’s common stock for each share of CCPT V Common Stock (as each term is defined in the CCPT V Merger Agreement) (with such ratio subject to adjustments in accordance with the terms and conditions of the CCPT V Merger Agreement), (ii) increase the amount of the Full Termination Payment (as defined in the CCPT V Merger Agreement) from $9.17 million to $9.85 million and (iii) increase the maximum amount of Expenses (as defined in the CCPT V Merger Agreement) payable by either by the Company or CCPT V to the other in connection with certain terminations of the CCPT V Merger Agreement from $1.67 million to $1.79 million.

Registration Statements on Form S-4

In connection with the Mergers, the Company filed two registration statements on Form S-4 (File Nos. 333-249292 and 333-249294), each of which was declared effective by the SEC on November 10, 2020, that contain a prospectus of the Company. The Mergers are currently anticipated to close by year end 2020.