Fortress Credit Realty Income (NYSE:O) Trust has entered into a substantial financial agreement, according to a recent 8-K filing with the Securities and Exchange Commission. On Sunday, November 8, 2024, the company's indirect, wholly-owned subsidiary FCR TL Holdings LLC ("FCR TL") secured a Loan and Security Agreement with JPMorgan Chase (NYSE:JPM) Bank, N.A., which will provide up to $300 million in loans and financial accommodations.
The agreement stipulates that the loans are available on an uncommitted basis and are due in full by May 8, 2027, unless an earlier termination is specified. The loans are secured by the assets of FCR TL and certain subsidiaries, including a pledge of equity interests by FCR TL's immediate parent entity. Interest rates for the loans are set at the higher of daily simple SOFR or zero, plus a 2% margin.
FCR TL is bound by various covenants under the agreement, including limitations on debt and investments. Furthermore, the agreement outlines standard events of default, which could lead to immediate repayment obligations if triggered.
Moreover, Fortress Credit Realty Income Trust has provided a Limited Guaranty, ensuring coverage for losses associated with non-recourse carve-outs and agreeing to maintain minimum net worth and liquidity as outlined in the agreement. This Limited Guaranty also covers certain "bad boy" events, which are further detailed in the agreement.
The information disclosed in this filing is based on the press release statement and the full text of the Loan and Security Agreement and Limited Guaranty, which were incorporated by reference into the 8-K filing. The financial instruments described, including the terms and obligations, reflect the company's strategic financial planning and are not indicative of the company's operational performance.
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