UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
report (Date of earliest event reported): April 13, 2010
OMEGA
HEALTHCARE INVESTORS, INC.
(Exact
name of registrant as specified in charter)
|
Maryland
|
1-11316
|
38-3041398
|
|
(State
of incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
200
International Circle
Suite
3500
Hunt
Valley, Maryland 21030
(Address
of principal executive offices / Zip Code)
(410)
427-1700
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
Written
communications pursuant to Rule 425 under the Securities Act.
Soliciting material pursuant to Rule
14a-12 under the Exchange Act.
Pre-commencement communications
pursuant to Rule 14d—2(b) under the Exchange Act.
Pre-commencement communications
pursuant to Rule 13e—4(c) under the Exchange Act.
Item
1.01 Entry into a Material Definitive Agreement.
On April
13, 2010, Omega Healthcare Investors, Inc. (“Omega”) entered into a new $320
million revolving senior secured credit facility (the “2010 Credit
Facility”). The 2010 Credit Facility matures in four years, on April
13, 2014; provided, however, if Omega has not refinanced or repaid its $310
million, 7% Senior Notes due April 2014 prior to December 31, 2013, the maturity
date for the 2010 Credit Facility will become December 31, 2013.
The 2010
Credit Facility is being provided by Bank of America, N.A., Deutsche Bank Trust
Company Americas, UBS Loan Finance LLC, General Electric Capital Corporation,
Crédit Agricole Corporate and Investment Bank, Jefferies Group, Inc., RBS
Citizens, N.A. and Stifel Bank & Trust (the “2010 Lenders”) pursuant to a
Credit Agreement, dated as of April 13, 2010 (the “2010 Credit Agreement”),
among the Omega subsidiaries named therein (the “2010 Borrowers”), the 2010
Lenders, and Bank of America, N.A., as administrative agent. Omega
and its subsidiaries have guaranteed the obligations of the 2010 Borrowers under
the 2010 Credit Agreement in favor of the Bank of America, N.A.
From time
to time, certain of the 2010 Lenders, their affiliates and/or their predecessors
have provided commercial banking, investment banking and other financial
advisory services to Omega or served as underwriters or sales agents for
offerings of Omega’s equity or debt, for which they have received customary
fees.
The
material terms of the 2010 Credit Facility are as follows:
Interest Rates and
Fees. The interest rates per annum applicable to
the 2010 Credit Facility are the reserve-adjusted LIBOR Rate (the “Eurodollar
Rate”), plus the applicable margin (as defined below) or, at our option, the
base rate, which will be the highest of (i) the rate of interest publicly
announced by the administrative agent as its prime rate in effect, (ii) the
federal funds effective rate from time to time plus 0.50% and (iii) the
Eurodollar Rate for a Eurodollar Loan with an interest period of one month plus
1.25%, in each case, plus the applicable margin (as defined below). The
applicable margin with respect to the 2010 Credit Facility is determined in
accordance with a performance grid based on our consolidated leverage ratio. The
applicable margin may range from 4.25% to 3.25% in the case of Eurodollar Rate
advances, from 3.0% to 2.0% in the case of base rate advances, and from
4.25% to 3.25% in the case of letter of credit fees. The default rate on the
2010 Credit Facility is 3.00% above the interest rate otherwise applicable to
base rate loans. We are also obligated to pay a commitment fee of
0.50% on the unused portion of the 2010 Credit Facility.
Prepayments. In
certain circumstances set forth in the 2010 Credit Agreement, we may prepay the
2010 Credit Facility at any time in whole or in part without fees or
penalty.
Covenants. The
2010 Credit Facility contains customary affirmative and negative covenants,
including, without limitation, limitations on investments; limitations on liens;
limitations on mergers, consolidations, and transfers of assets; limitations on
sales of assets; limitations on transactions with affiliates; and limitations on
our transfer of ownership and management. In addition, the 2010 Credit Facility
contains financial covenants including, without limitation, with respect to
maximum leverage ratio, minimum fixed charge coverage ratio, minimum tangible
net worth and maximum distributions.
Events of
Default. The 2010 Credit Facility includes
customary events of default including, without limitation, nonpayment of
principal, interest, fees or other amounts when due, covenant defaults,
cross-defaults, a change of control, bankruptcy events, material unsatisfied or
unstayed judgments, and loss of real estate investment trust (“REIT”)
status.
Right to Increase
Maximum Borrowings. Pursuant to the terms of the 2010 Credit
Agreement, the 2010 Lenders have agreed that in certain circumstances Omega may
increase the revolving commitments under the 2010 Credit Facility by up to an
additional $100 million, for maximum aggregate borrowings outstanding of up
to $420 million.
Security and
Guarantees. Omega and its subsidiaries that are
not borrowers under the 2010 Credit Facility guarantee the obligations of the
2010 Borrowers under the 2010 Credit Facility. All obligations under the 2010
Credit Facility and the related guarantees are secured by a perfected first
priority lien on certain real properties and all improvements, fixtures,
equipment and other personal property relating thereto of the 2010 Borrowers,
and an assignment of leases, rents, sale/refinance proceeds and other proceeds
flowing from the real properties.
At April
13, 2010, Omega had no borrowings outstanding under the 2010 Credit
Facility.
The 2010
Credit Agreement is attached to this Current Report on Form 8-K as Exhibit 10.1
and is incorporated herein by reference.
Item
1.02 Termination of a Material Definitive
Agreement.
On April
13, 2010, Omega terminated its previous revolving senior secured credit facility
(the “2009 Credit Facility”). The 2009 Credit Facility was provided
pursuant to that certain credit agreement, dated as of June 30, 2009 (the “2009
Credit Agreement”) with Banc of America Securities LLC as lead arranger, Bank of
America, N.A. as administrative agent and a syndicate of other financial
institutions as lenders, which included Bank of America, N.A., Deutsche Bank
Trust Company Americas, UBS Loan Finance LLC and General Electric Capital
Corporation (the “2009 Lenders”). The 2009 Credit Facility initially
provided a $200 million senior secured three-year revolving credit
facility. The borrowers under the 2009 Credit Facility were certain of Omega’s
subsidiaries that hold borrowing base properties (the “2009
Borrowers”).
The material terms of the 2009 Credit
Facility were as follows:
Interest Rates and
Fees. The interest rates per annum applicable to
the 2009 Credit Facility were the Eurodollar Rate, plus the applicable margin
(as defined below) or, at our option, the base rate, which was the highest of
(i) the rate of interest publicly announced by the administrative agent as
its prime rate in effect, (ii) the federal funds effective rate from time
to time plus 0.50% and (iii) the Eurodollar Rate determined on such day (or if
no rate was determined on such day the next preceding day for which a Eurodollar
Rate was determined) for a Eurodollar Loan with an interest period of one month
plus 1.25%, in each case, plus the applicable margin (as defined below). The
applicable margin with respect to the 2009 Credit Facility was determined in
accordance with a performance grid based on our consolidated leverage ratio. The
applicable margin ranged from 4.75% to 3.75% in the case of Eurodollar Rate
advances, from 3.5% to 2.5% in the case of base rate advances, and from
4.75% to 3.75% in the case of letter of credit fees. The default rate on the
2009 Credit Facility was 3.00% above the interest rate otherwise applicable to
base rate loans. The 2009 Borrowers were also obligated to pay a commitment fee
of 0.50% on the unused portion of the 2009 Credit Facility.
Prepayments. The
2009 Credit Agreement provided for prepayment of the 2009 Credit Facility at any
time in whole or in part without fees or penalty.
Covenants. The
2009 Credit Facility contained customary affirmative and negative covenants,
including, without limitation, limitations on investments; limitations on liens;
limitations on mergers, consolidations, and transfers of assets; limitations on
sales of assets; limitations on transactions with affiliates; and limitations on
our transfer of ownership and management. In addition, the 2009 Credit Facility
contained financial covenants including, without limitation, with respect to
maximum leverage ratio, minimum fixed charge coverage ratio, minimum tangible
net worth and maximum distributions.
Events of
Default. The 2009 Credit Facility included
customary events of default including, without limitation, nonpayment of
principal, interest, fees or other amounts when due, covenant defaults,
cross-defaults, a change of control, bankruptcy events, material unsatisfied or
unstayed judgments, and loss of REIT status.
Right to Increase
Maximum Borrowings. Under the 2009 Credit Agreement, the 2009
Lenders agreed that in certain circumstances Omega may increase the revolving
commitments under the 2009 Credit Facility by up to an additional
$100 million, for maximum aggregate borrowings outstanding of up to
$300 million.
Security and
Guarantees. Omega and its subsidiaries that were
not borrowers under the 2009 Credit Facility guaranteed the obligations of the
2009 Borrowers under the 2009 Credit Facility. All obligations under the 2009
Credit Facility and the related guarantees were secured by a perfected first
priority lien on certain real properties and all improvements, fixtures,
equipment and other personal property relating thereto of the 2009 Borrowers,
and an assignment of leases, rents, sale/refinance proceeds and other proceeds
flowing from the real properties.
Omega and
its subsidiaries terminated the 2009 Credit Facility in connection with the
effectiveness of the 2010 Credit Facility. Omega did not experience
any material early termination penalties due to the termination of the 2009
Credit Facility. For the three month period ending June 30, 2010,
Omega will record a one-time, non-cash charge of approximately $3.5 million
relating to the write-off of deferred financing costs associated with the
termination of the 2009 Credit Facility.
Item
2.03 Creation of Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
See Item
1.01 above, which is incorporated herein by reference, for a discussion of the
creation of a direct financial obligation under the 2010 Credit
Facility.
Item
9.01. Financial Statements and Exhibits.
|
10.1
|
Credit
Agreement, dated as of April 13, 2010, among OHI Asset, LLC, OHI Asset
(ID), LLC, OHI Asset (LA), LLC, OHI Asset (CA), LLC, Delta Investors I,
LLC, Delta Investors II, LLC, OHI Asset (CO), LLC, Colonial Gardens, LLC,
Wilcare, LLC, Texas Lessor- Stonegate, LP, OHIMA, Inc., Canton Health Care
Land, Inc., Dixon Health Care Center, Inc., Hutton I Land, Inc., Hutton II
Land, Inc., Hutton III Land, Inc., Leatherman Partnership 89-1, Inc.,
Leatherman Partnership 89-2, Inc., Leatherman 90-1, Inc., Meridian Arms
Land, Inc., Orange Village Care Center, Inc., St. Mary’s Properties, Inc.
the lenders named therein, and Bank of America,
N.A.
|
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 thereunto duly
authorized.
|
OMEGA
HEALTHCARE INVESTORS, INC.
|
|
|
|
|
|
|
|
By: /s/ Robert O.
Stephenson
|
|
Name: Robert
O. Stephenson
|
|
Title:
Chief Financial Officer
|
Dated: April
16, 2010