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DFT > SEC Filings for DFT > Form 8-K on 2-Apr-2013All Recent SEC Filings

Show all filings for DUPONT FABROS TECHNOLOGY, INC. | Request a Trial to NEW EDGAR Online Pro

Form 8-K for DUPONT FABROS TECHNOLOGY, INC.


2-Apr-2013

Entry into a Material Definitive Agreement, Other Events


Item 1.01. Entry into a Material Definitive Agreement.
On March 27, 2013 (the "Closing Date"), a subsidiary (the "Borrower") of DuPont Fabros Technology, Inc. (the "Company"), and DuPont Fabros Technology, L.P., the operating partnership of the Company (the "Operating Partnership"), entered into a Credit Agreement relating to a $115 million secured term loan facility (the "Facility") with KeyBank National Association ("KeyBank"), as a Lender and Agent, and the other lending institutions that are parties thereto, and KeyBanc Capital Markets ("KBCM"), as Sole Lead Arranger and Sole Book Manager (the "Credit Agreement"). The Company used the proceeds along with cash-on-hand to repay an existing loan that had an outstanding balance of $138.3 million and was secured by the Company's ACC5 and ACC6 data center facilities, which was scheduled to mature in December 2014.
The term loan matures on March 27, 2018. The Borrower may elect to have borrowings under the Facility bear interest at (i) LIBOR plus 1.85% or (ii) the greater of (a) the base rate, which is the greater of KeyBank's prime rate and 0.5% above the Federal Reserve Bank of Cleveland's rate, plus in each case 0.85%, and (b) the 30-day LIBOR plus 1.85%.
The term loan is secured by ACC3, a wholesale data center owned by the Borrower located in Ashburn, Virginia, and an assignment of the lease agreement between Borrower and the tenant of ACC3. In addition, the term loan is guaranteed by the Operating Partnership (the "Guaranty").
The Credit Agreement requires the Borrower to make quarterly installments of principal of (a) $1.25 million for the period from April 1, 2016 through January 1, 2017, and (b) $2.5 million for the period from April 1, 2017 through January 1, 2018. The Credit Agreement provides that the Borrower may prepay any outstanding balance in whole or in part without penalty, subject to the payment of certain customary LIBOR breakage costs.
The Credit Agreement requires ongoing compliance by the Borrower with various covenants, including with respect to restrictions on liens, incurring indebtedness and making investments, and compliance by the Borrower and the Operating Partnership with various covenants, including with respect to effecting mergers and/or assets sales. In addition, the Credit Agreement requires ongoing compliance with certain financial covenants, including, without limitation, the following:
The Borrower must maintain a minimum debt service coverage ratio of 1.50 to 1;

         The Operating Partnership and its subsidiaries must maintain
          consolidated total indebtedness to be less than 60% of gross asset
          value during the term of the loan (the "Leverage Test").


         The Operating Partnership and its subsidiaries must maintain a ratio of
          adjusted consolidated Earnings Before Interest Taxes Depreciation and
          Amortization to consolidated fixed charges to be not less than 1.70 to
          1 during the term of the loan (the "Fixed Charge Coverage Ratio").


         The Operating Partnership and its subsidiaries must maintain a minimum
          consolidated tangible net worth of not less than $1,300 million (plus
          80% of the sum of (i) the net proceeds from any offerings after the
          Closing Date and (ii) the value of any interests in the Operating
          Partnership or the Company issued upon the contribution of assets to
          the Operating Partnership or its subsidiaries after the Closing Date)
          during the term of the loan (the "Minimum Consolidated Tangible Net
          Worth").

The Leverage Test, the Fixed Charge Coverage Ratio and the Minimum Consolidated Tangible Net Worth are the same financial maintenance covenants that the Operating Partnership currently must comply with under the revolving Credit Agreement, dated as of May 6, 2010 (as amended, the Revolving Credit Facility"), by and among the Operating Partnership, as borrower, the Company, as guarantor and KeyBank, as agent.
The Credit Agreement includes customary events of default of which, following any applicable cure period, would permit the Lenders to, among other things, declare the principal, accrued interest and other obligations of the Borrower under the Facility to be immediately due and payable. The events of default include, among other things, a change of control of the Company, the Operating Partnership or the Borrower.
The foregoing summary does not purport to be a complete description of the terms of the Credit Agreement and the Guaranty, and such description is qualified in its entirety by reference to the Credit Agreement and the Guaranty, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.
From time to time, the Company has had customary commercial banking relationships with KeyBank and investment banking relationships with affiliates of KeyBank.

* * *
The Company also issued a press release on April 2, 2013 announcing that the Borrower and Operating Partnership had entered into the Credit Agreement, a copy of which is filed herewith as Exhibit 99.1.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.


The disclosure contained in Item 1.01 is incorporated herein by reference.



Item 8.01. Other Events.
On March 27, 2013, Xeres Ventures LLC ("Xeres") entered into two joinder agreements: (1) a Supplemental Indenture among the Operating Partnership, the guarantors party thereto and U.S. Bank National Association pursuant to which Xeres became a guarantor under the Indenture, dated December 16, 2009, for the 8% Senior Notes due 2017 (the "Notes") of the Operating Partnership and guarantees on an unsecured basis the payment of principal, premium, if any, and interest on, and all amounts payable under the Notes; and (2) a Joinder Agreement with Key Bank under which Xeres became a guarantor of the Operating Partnership's obligations under the Credit Agreement, dated as of May 6, 2010, by and among the Operating Partnership, as Borrower, KeyBank, as Agent and a Lender, and the other lending institutions that are parties thereto, as Lenders, and KBCM, as Sole Lead Arranger and Sole Book Manager, as amended, which governs the Operating Partnership's $225 million unsecured credit facility (the "Unsecured Credit Facility"). These joinder agreements have the effect of adding the SC1 data center facility that is owned by Xeres to the unencumbered asset pool that supports the Notes and the Unsecured Credit Facility. Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1         Credit Agreement, dated as of March 27, 2013, by and among Quill
             Equity LLC, as Borrower, DuPont Fabros Technology, L.P., as
             Guarantor, KeyBank National Association, as Agent and a Lender, and
             the other lending institutions that are parties thereto (and the
             other lending institutions that may become party thereto), as
             Lenders, and KeyBanc Capital Markets, as Sole Lead Arranger and Sole
             Book Manager


10.2         Guaranty, dated as of March 27, 2013, by DuPont Fabros Technology,
             L.P. for the benefit of the Agent and the Lenders


99.1         Press Release of the Company announcing that Quill Equity LLC and
             DuPont Fabros Technology, L.P entered into the Credit Agreement,
             dated April 2, 2013


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