Item 1.01 Entry into a Material Definitive Agreement.
On August 14, 2024, UDR, Inc. (the “Company”), as borrower, entered into a second amendment to the second amended and restated credit agreement, which amended that certain second amended and restated credit agreement (the “Credit Agreement”), extended the $1.3 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) and added an extension option to the $350 million senior unsecured term loan (the “Term Loan”). The Credit Agreement includes an accordion feature that allows the total commitments under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to an aggregate maximum amount of up to $2.5 billion, subject to certain conditions including obtaining commitments from one or more lenders. As amended, the Revolving Credit Facility has a scheduled maturity date of August 31, 2028, with two six-month extension options, subject to certain conditions. As amended, the Term Loan has a scheduled maturity date of January 31, 2027, with one twelve-month extension option, subject to certain conditions.
Wells Fargo Bank, National Association served as Administrative Agent, and Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A. served as Joint Bookrunners, and together with PNC Capital Markets LLC, U.S. Bank National Association, Regions Capital Markets, a Division of Regions Bank, TD Bank, N.A. and Truist Securities, Inc. served as Joint Lead Arrangers. JPMorgan Chase Bank, N.A. served as Syndication Agent, PNC Bank, National Association, U.S. Bank National Association, Regions Bank, Bank of America, N.A., Citibank, N.A. TD Bank, N.A. and Truist Bank served as Documentation Agents. Wells Fargo Securities, LLC served as Term Sustainability Structuring Agent.
Based on the Company’s current credit rating, the Revolving Credit Facility has an applicable margin of 77.5 basis points and a facility fee of 15 basis points, and the Term Loan has an applicable margin of 85 basis points. Depending on the Company’s credit rating the margin under the Revolving Credit Facility ranges from 70 to 140 basis points and the facility fee ranges from 10 to 30 basis points, and the margin under the Term Loan ranges from 75 to 160 basis points. Further, as amended, the Credit Agreement includes sustainability adjustments pursuant to which the applicable margin for the Term Loan may be reduced by up to two basis points contingent upon the Company receiving green building certifications. In addition, the Credit Agreement, as amended, allows for the Company in consultation with the sustainability structuring agent to propose key performance indicators with respect to certain environmental, social, and governance goals of the Company, and thresholds or targets with respect thereto, and a related amendment to the Credit Agreement, that if entered into may allow a change in the applicable margin for the Revolving Credit Facility of up to four basis points and a change in the applicable facility fee of up to one basis point.
The Credit Agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Credit Agreement also includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the Credit Agreement to be immediately due and payable.
The Company’s obligations under the Credit Agreement are guaranteed by United Dominion Realty, L.P., the Company’s operating partnership, pursuant to the Guaranty dated as of September 15, 2021 (the “Guaranty”). Pursuant to the amendment, United Dominion Realty, L.P. reaffirmed its continuing obligations under the Guaranty.
A copy of the second amendment to the second amended and restated credit agreement, which includes the Credit Agreement as an exhibit, is attached hereto as Exhibit 10.1 and is incorporated herein by this reference. The foregoing summary of the material terms of the Credit Agreement, as amended, and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1.
