UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
Issuance of 7.000% Senior Notes due 2031
On July 5, 2024, Ladder Capital Finance Holdings LLLP (“LCFH”) and Ladder Capital Finance Corporation (together with LCFH, the “Issuers”), subsidiaries of Ladder Capital Corp (“Ladder” or the “Company”), issued $500 million aggregate principal amount of 7.000% senior notes due 2031 (the “Senior Notes”).
The Issuers intend to use a portion of the net proceeds of the offering of the Senior Notes to repay certain existing secured indebtedness, with the remaining net proceeds to be used for general corporate purposes.
The Senior Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Senior Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Indenture
The Senior Notes were issued under an Indenture, dated July 5, 2024 (the “Indenture”), among the Issuers, the guarantors named therein (including the Company) and Wilmington Trust, National Association, as trustee.
The Indenture provides, among other things, that the Senior Notes will be senior unsecured obligations of the Issuers. Interest on the Senior Notes is payable semi-annually on July 15 and January 15 of each year, beginning on January 15, 2025, at a rate of 7.000% per annum, until their maturity date of July 15, 2031. The Indenture contains covenants that, among other things:
| · | limit LCFH’s ability and the ability of its restricted subsidiaries to incur additional indebtedness or issue certain disqualified stock and preferred shares; |
| · | require that certain of LCFH’s wholly owned domestic subsidiaries guarantee the Senior Notes; | |
| · | require that LCFH maintain Total Unencumbered Assets (as defined in the Indenture) of not less than 120% of the aggregate principal amount of the outstanding unsecured indebtedness of LCFH and its restricted subsidiaries; and |
| · | limit LCFH’s ability to merge or consolidate with another company or sell all or substantially all of its assets. |
These covenants are subject to a number of important exceptions and qualifications. In addition, certain of these covenants, including the limitation on indebtedness, will automatically and permanently terminate and be of no further force and effect (and the guarantors of the Senior Notes, if any, will be automatically and permanently released from their guarantees of the Senior Notes and all of their obligations under the Indenture) if: (i) the Senior Notes have received an investment grade rating from at least two Rating Agencies (as defined in the Indenture); and (ii) no Default or Event of Default (each as defined in the Indenture) has occurred and is continuing under the Indenture.
If LCFH experiences certain kinds of changes of control and the Senior Notes receive a ratings downgrade, the Issuers will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount thereof plus accrued but unpaid interest, if any, to, but not including, the repurchase date.
The Issuers may redeem the Senior Notes at any time, in whole or in part, prior to their maturity. The redemption price for Senior Notes that are redeemed before July 15, 2027 will be equal to 100% of the principal amount thereof, together with any accrued and unpaid interest, if any, to, but not including, the redemption date, plus a make-whole premium. The redemption price for Senior Notes that are redeemed on or after July 15, 2027 will be equal to the redemption prices set forth in the Indenture, together with any accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, the Issuers may redeem up to 40% of the Senior Notes using the proceeds of certain equity offerings completed before July 15, 2027 at a redemption price equal to 107.0% of the principal amount thereof, together with any accrued and unpaid interest, if any, to, but not including, the redemption date.
The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods) nonpayment of principal or interest; breach of other agreements in the Indenture; defaults in failure to pay certain other indebtedness; the failure to pay final judgments in excess of certain amounts of money against the Issuers and their subsidiaries; the failure of certain guarantees to be enforceable (other than in accordance with the terms of the Indenture); and certain events of bankruptcy or insolvency.
The foregoing summary of the Indenture and the Senior Notes does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Indenture and the form of the Senior Note, copies of which are filed herewith as Exhibit 4.1 and Exhibit 4.2, respectively, and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 4.1 | Indenture, dated July 5, 2024, among Ladder Capital Finance Holdings LLLP, Ladder Capital Finance Corporation, the guarantors party thereto and Wilmington Trust, National Association, as trustee. | |
| 4.2 | Form of Senior Note (included in Exhibit 4.1). | |
| 104 | The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101). |
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.
| LADDER CAPITAL CORP | ||
| Date: July 5, 2024 | By: | /s/ Kelly Porcella |
| Name: | Kelly Porcella | |
| Title: | Chief Administrative Officer & General Counsel | |