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.
Credit Agreement
On October 24, 2024 (the “Effective Date”), National Health Investors, Inc. (the “Company”) entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (the “Agent”), and the financial institutions party thereto as lenders and agents, which provides for aggregate revolving loan commitments of $700 million (the “Revolving Credit Facility”). The Credit Agreement amends and restates that certain Credit Agreement (the “Existing Credit Agreement”), dated as of March 31, 2022, among the Company, the Agent and the financial institutions party thereto as lenders and agents, which provided for a $700 million unsecured revolving credit facility.
The Credit Agreement includes the option to increase the revolving loan commitments or add term loans under the Credit Agreement to up to $1.0 billion in the aggregate to the extent the lenders (from the syndicate or otherwise) agree to provide additional revolving loan commitments or term loans. The Revolving Credit Facility will mature on October 24, 2028, unless extended pursuant to (i) one or both of the two six-month extension options or (ii) one twelve-month extension option provided therein. The exercise of an extension option requires the payment of a fee of 0.0625% on the extended revolving loan commitments for each six-month extension (or 0.125% in the case of a twelve-month extension) and is subject to certain other customary conditions. The Credit Agreement also provides the Company with the ability to obtain letters of credit of up to $30 million in the aggregate and swingline loans of up to $30 million in the aggregate. As of October 24, 2024, $307.4 million of the Revolving Credit Facility was outstanding under the Credit Agreement.
The Credit Agreement is guaranteed by certain subsidiaries of the Company that guarantee other unsecured indebtedness of the Company. Subsidiaries of Company are required to guarantee the Company’s obligations under the Credit Agreement if any such subsidiary incurs unsecured indebtedness or guarantees unsecured indebtedness of the Company or another subsidiary of the Company (excluding, among other things, guarantees of certain indebtedness in an aggregate principal amount not in excess of $5 million).
Borrowings under the Revolving Credit Facility will bear interest, at Company’s option, at a rate of either Term SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, Daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or the base rate plus a margin ranging from 0.00% to 0.40%, in each case, with the actual margin determined according to the Company’s credit rating. The base rate is the highest of the Agent’s prime rate, the federal funds rate plus 0.50% and the adjusted Term SOFR for a one-month tenor plus 1.0%. In addition, the Credit Agreement requires the payment of a facility fee equal to 0.125% to 0.30% (depending on the Company’s credit rating) on the $700 million committed capacity in respect of the Revolving Credit Facility, without regard to usage.
The Credit Agreement contains representations, financial and other affirmative and negative covenants that are similar to the Existing Credit Agreement and generally customary for credit facilities of this type. The Credit Agreement requires that the Company comply with various covenants, including covenants restricting indebtedness, mergers, affiliate transactions, entering into agreements with restrictions on granting liens or intercompany transfers, asset sales, indebtedness and the payment of dividends following an event of default. In addition, the Credit Agreement requires that the Company satisfy certain financial maintenance covenants, including:
| • | ratio of consolidated total indebtedness to consolidated total asset value of not more than 0.60 to 1.00 (subject to a higher level of 0.65 to 1.00 for four quarters following material acquisitions); |
| • | a minimum consolidated tangible net worth of $1.475 billion; |
| • | ratio of consolidated EBITDA to consolidated fixed charges of not less than 1.50 to 1.00; |
| • | ratio of secured indebtedness to consolidated total asset value of not more than 0.30 to 1.00; |
| • | ratio of unsecured indebtedness to unencumbered asset value of not more than 0.60 to 1.00 (subject to a higher level of 0.65 to 1.00 for four quarters following material acquisitions); and |
| • | ratio of consolidated net operating income from all properties include in unencumbered asset value to consolidated unsecured interest expense of not less than 2.00 to 1.00. |
The Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the Credit Agreement to be immediately due and payable.
Amendment to Existing Term Loan Agreement
On the Effective Date, the Company entered into an Amendment No. 1 to Term Loan Agreement (the “Amendment”) with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto, which amends the existing Term Loan Agreement, dated as of June 16, 2023 (as amended, supplemented or otherwise modified prior to the Effective Date, the “Existing Term Loan Agreement”), by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and the lenders from time to time party thereto. The Existing Term Loan Agreement provided for an unsecured term loan facility in a principal amount of $200 million and matures on June 16, 2025 (the “Term Loan”). As of October 24, 2024, the outstanding principal balance of the Term Loan was $200.0 million.
The Amendment, among other things, modifies the existing representations, covenants, financial covenants and events of default in the Existing Term Loan Agreement to align with the same provisions in the Credit Agreement.
Except as amended by the Amendment, the terms of the Existing Term Loan Agreement remain in full force and effect.
Certain of the lenders under Revolving Credit Facility and the Term Loan or their affiliates have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for the Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.
The foregoing descriptions of the Credit Agreement and the Amendment does not purport to be a complete statement of the terms and conditions of the Credit Agreement and the Amendment and is qualified in its entirety by reference to the text of such Credit Agreement and the Amendment, copies of which will be filed as exhibits to the Company’s Annual Report on Form 10-K for the year ending December 31, 2024.
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 under Item 1.01 of this report is hereby incorporated by reference into this Item 2.03.
SIGNATURE
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.
| NATIONAL HEALTH INVESTORS, INC. | ||
| By: | /s/ John L. Spaid | |
| Name: | John L. Spaid | |
| Title: | President and Chief Executive Officer | |
Date: October 25, 2024
Document and Entity Information |
Oct. 24, 2024 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | NATIONAL HEALTH INVESTORS INC |
| Amendment Flag | false |
| Entity Central Index Key | 0000877860 |
| Document Type | 8-K |
| Document Period End Date | Oct. 24, 2024 |
| Entity Incorporation State Country Code | MD |
| Entity File Number | 001-10822 |
| Entity Tax Identification Number | 62-1470956 |
| Entity Address, Address Line One | 222 Robert Rose Drive |
| Entity Address, City or Town | Murfreesboro |
| Entity Address, State or Province | TN |
| Entity Address, Postal Zip Code | 37129 |
| City Area Code | (615) |
| Local Phone Number | 890-9100 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $0.01 par value |
| Trading Symbol | NHI |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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