form_8k.htm
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): June 30, 2009
OMEGA
HEALTHCARE INVESTORS, INC.
(Exact
name of registrant as specified in charter)
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Maryland
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1-11316
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38-3041398
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(State
of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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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:
Soliciting material pursuant to Rule
14a-12 under the Exchange Act.
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act.
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act.
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Item
1.01 Entry into a Material Definitive Agreement.
On June
30, 2009, Omega Healthcare Investors, Inc. (“Omega”) entered into a new
three-year $200 million revolving senior secured credit facility (the “New
Credit Facility”).
The New
Credit Facility is being provided by Bank of America, N.A., Deutsche Bank Trust
Company Americas, UBS Loan Finance LLC and General Electric Capital Corporation
(the “Lenders”) pursuant to a Credit Agreement, dated as of June 30, 2009 (the
“New Credit Agreement”), among the Omega subsidiaries named therein
(“Borrowers”), the lenders named therein, and Bank of America, N.A., as
administrative agent. Omega and its subsidiaries have guaranteed the
obligations of the Borrowers under the New Credit Agreement in favor of the Bank
of America, N.A.
The
material terms of the New Credit Facility are as follows:
Interest Rates and
Fees. The interest rates per annum applicable to
the New 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 New Credit Facility is determined in
accordance with a performance grid based on our consolidated leverage ratio. The
applicable margin may range 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 New
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 our New Credit Facility.
Prepayments. In
certain circumstances set forth in the New Credit Agreement, we may prepay the
New Credit Facility at any time in whole or in part without fees or
penalty.
Covenants. The
New 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 New 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 New 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 New Credit
Agreement, the Lenders have agreed that in certain circumstances Omega may
increase the revolving commitments under the New 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 are
not borrowers under the New Credit Facility guarantee the obligations of our
borrower subsidiaries under the New Credit Facility. All obligations under the
New 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 subsidiaries party
to the New Credit Facility, and an assignment of leases, rents, sale/refinance
proceeds and other proceeds flowing from the real properties.
At June
30, 2009, Omega had $46 million of borrowings outstanding under the New Credit
Facility.
On June
12, 2009, Omega entered into separate Equity Distribution Agreements with
each of UBS Securities LLC, Deutsche Bank Securities Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, each an affiliate of certain of
the Lenders, as previously reported by Omega on Form 8-K on June 15,
2009.
The New
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 June
30, 2009, Omega terminated its previous revolving senior secured credit facility
(“Prior Credit Facility”). The Prior Credit Facility was provided
pursuant to that certain credit agreement, dated as of March 31, 2006 (the
“Prior 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 Securities, LLC, General Electric Capital
Corporation, LaSalle Bank, N.A. and Citicorp North America, Inc.. The
Prior Credit Facility initially provided a $200 million senior secured
four-year revolving credit facility and was subsequently increased to $255
million. The borrowers under the Prior Credit Facility were certain of Omega’s
subsidiaries that hold borrowing base properties (the “Prior
Borrowers”).
The
material terms of the Prior Credit Facility were as follows:
Interest Rates and
Fees. The interest rates per annum applicable to
the Prior Credit Facility were the Eurodollar Rate, plus the applicable margin
(as defined below) or, at our option, the base rate, which was the higher of
(i) the rate of interest publicly announced by the administrative agent as
its prime rate in effect, and (ii) the federal funds effective rate from
time to time plus 0.50%, in each case, plus the applicable margin (as defined
below). The applicable margin with respect to the Prior Credit Facility was
determined in accordance with a performance grid based on our consolidated
leverage ratio. The applicable margin ranged from 2.0% to 0.5% in the case of
Eurodollar Rate advances, from 0.75% to .00% in the case of base rate advances,
and from 2.0% to 0.5% in the case of letter of credit fees. The default rate on
the Prior Credit Facility was 3.00% above the interest rate otherwise applicable
to base rate loans. The Prior Borrowers were also obligated to pay a commitment
fee of 0.35% on the unused portion of the Prior Credit Facility if usage was
less than fifty percent and 0.25% on the unused portion of the Prior Credit
Facility if usage exceeded fifty percent.
Prepayments. The
Prior Credit Agreement provided for prepayment of the Prior Credit Facility at
any time in whole or in part without fees or penalty.
Covenants. The
Prior 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 Prior 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 Prior 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 Prior Credit
Agreement, the Lenders agreed that in certain circumstances Omega may increase
the revolving commitments under the Prior 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 Prior Credit Facility guaranteed the obligations of the
Prior Borrowers under the Prior Credit Facility. All obligations under the Prior
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 subsidiaries party
to the Prior Credit Facility, and an assignment of leases, rents, sale/refinance
proceeds and other proceeds flowing from the real properties.
Omega and
its subsidiaries terminated the Prior Credit Facility in connection with the
effectiveness of the New Credit Facility. Omega did not experience
any material early termination penalties due to the termination of the Prior
Credit Facility. For the three-month period ending June 30, 2009,
Omega will record a one-time, non-cash charge of approximately $0.5 million
relating to the write-off of deferred financing costs associated with the
termination of the Prior 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 New Credit
Facility.
Item
9.01. Financial Statements and Exhibits.
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10.1
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Credit
Agreement, dated as of June 30, 2009, among OHI Asset, LLC, OHI Asset
(ID), LLC, OHI Asset (LA), LLC, OHI Asset (CA), LLC, Delta Investors I,
LLC, Delta Investors II, LLC, Texas Lessor- Stonegate, LP, OHIMA, Inc.,
the lenders named therein, and Bank of America, N.A.
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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.
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OMEGA
HEALTHCARE INVESTORS, INC.
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By: /s/ C. Taylor
Pickett
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Name: C.
Taylor Pickett
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Title:
Chief Executive Officer
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Dated: July
6, 2009