Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
KRG > SEC Filings for KRG > Form 8-K on 8-Jul-2014All Recent SEC Filings

Show all filings for KITE REALTY GROUP TRUST

Form 8-K for KITE REALTY GROUP TRUST


8-Jul-2014

Entry into a Material Definitive Agreement, Completion of Acquisition or


Item 1.01 Entry into a Material Definitive Agreement.

Fourth Amended and Restated Credit Agreement

On July 1, 2014, Kite Realty Group, L.P. (the "Operating Partnership") entered into a Fourth Amended and Restated Credit Agreement (the "Amended Credit Agreement") providing for a $500 million unsecured revolving credit facility (the "Revolving Facility") and a $230 million unsecured term loan facility (the "Term Loan") with KeyBank National Association, as Administrative Agent (the "Agent"), and the other lenders party thereto. The Amended Credit Agreement amended, restated and consolidated the Third Amended and Restated Credit Agreement, dated February 26, 2013 (the "Prior Credit Agreement"), among Kite Realty Group Trust (the "Company"), the Operating Partnership, the Agent and the other lenders party thereto and the Term Loan Agreement, dated as of February 26, 2013, by and among the Company, the Operating Partnership, the Agent and the lender parties thereto, as amended (the "Prior Term Loan Agreement").

The Revolving Facility has a scheduled maturity date of July 1, 2018 (compared to February 26, 2017 under the Prior Credit Agreement), which maturity date may be extended for up to two additional periods of six months at the Operating Partnership's option subject to certain conditions. The Term Loan has a scheduled maturity date of July 1, 2019 (compared to August 21, 2018 under the Prior Term Loan Agreement), which maturity date may be extended until January 1, 2020 at the Operating Partnership's option, subject to certain conditions.

The Operating Partnership has the option to increase the Revolving Facility to $750 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Amended Credit Agreement, to provide such increased amounts. The Operating Partnership has the option to increase the Term Loan to provide for an additional $170 million in term loans, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Amended Credit Agreement, to provide such increased amounts. The Amended Credit Agreement permits the Operating Partnership to utilize up to $50 million of the Revolving Facility for the issuance of letters of credit and includes swingline loan capacity for up to $50 million in same day borrowings.

Prior to the Company or the Operating Partnership obtaining a credit rating of BBB- or higher from Standard & Poor's Rating Services or Baa3 or higher from Moody's Investors Services, Inc. (an "Investment Grade Rating"), (i) borrowings under the Amended Credit Agreement with respect to the Revolving Facility will, subject to certain exceptions, bear interest at a rate of LIBOR plus an applicable margin of 140 to 200 basis points, depending on the Operating Partnership's leverage ratio and (ii) borrowings under the Amended Credit Agreement with respect to the Term Loan will, subject to certain exceptions, bear interest at a rate of LIBOR plus an applicable margin of 135 to 190 basis points, depending on the Operating Partnership's leverage ratio.

In the event that the Company or the Operating Partnership obtains an Investment Grade Rating and elects to use such Investment Grade Rating as the basis for determining the interest rate under the Amended Credit Agreement, the applicable margin will be determined by such credit rating rather than the leverage ratio. In such event, (i) borrowings under the Amended Credit Agreement with respect to the Revolving Facility will, subject to certain exceptions, bear interest at a rate of LIBOR plus an applicable margin of 87.5 to 170 basis points, depending on the credit rating and (ii) borrowings under the Amended Credit Agreement with respect to the Term Loan will, subject to certain exceptions, bear interest at a rate of LIBOR plus an applicable margin of 95 to 190 basis points, depending on the credit rating.


Prior to the Company or the Operating Partnership obtaining an Investment Grade Rating, an unused commitment fee of 15 to 25 basis points, depending on the amount of Revolving Facility borrowings under the Amended Credit Agreement, accrues on unused portions of the Revolving Facility commitments under the Amended Credit Agreement. After the date on which the Company or the Operating Partnership obtains an Investment Grade Rating and elects to use such Investment Grade Rating as the basis for determining the interest rate under the Amended . . .



Item 2.01 Completion of Acquisition or Disposition of Assets.

On July 1, 2014, the Company completed the merger transactions contemplated by the Agreement and Plan of Merger by and among the Company, KRG Magellan, LLC ("Merger Sub") and Inland Diversified Real Estate Trust, Inc. ("Inland Diversified"), dated February 9, 2014 (the "Merger Agreement"), pursuant to which Inland Diversified merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation and a wholly-owned subsidiary of the Company (the "Merger"). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, par value $0.001 per share, of Inland Diversified ("Inland Diversified Common Stock") was converted into the right to receive 1.707 of the Company's common shares, par value $0.01 per share ("Kite Realty Common Shares"), with cash paid in lieu of fractional shares. The Company issued 201,089,235 Kite Realty Common Shares as consideration in the Merger. Based on the closing price of the Company's common shares on June 30, 2014, as reported on the New York Stock Exchange, the aggregate value of the merger consideration paid or payable to former holders of Inland Diversified Common Stock was approximately $1.2 billion.

A copy of the Merger Agreement has been previously filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2014, and is incorporated by reference herein. The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As a result of the merger transactions contemplated by the Merger Agreement, on July 1, 2014, the Company, through certain of its subsidiaries, assumed approximately $860 million aggregate principal amount of existing mortgage indebtedness of Inland Diversified and its subsidiaries (41 of which were wholly-owned by Inland Diversified). The mortgage loans are secured by a total of 47 underlying properties (41 of which were wholly-owned by Inland Diversified), bear interest at fixed rates ranging


from 3.81% to 6.19% per annum or at a variable rates ranging from LIBOR plus 1.75% to LIBOR to 2.75% (as of July 1, 2014) and have remaining maturities ranging from approximately 11 months to 8 years and nine months. The agreements governing all of the mortgages contain customary rights of the lender to accelerate the loan upon, among other things, a payment default or if certain representations and warranties made by the borrower are untrue.

The information under the Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Election of Directors

As previously disclosed, in connection with the Merger and pursuant to the terms of the Merger Agreement, the Company's Board of Trustees (the "Board") was increased to nine members, six of whom are continuing trustees of the Company and three of whom were designated by Inland Diversified. The three Inland Diversified designees to the Board are Lee A. Daniels, Gerald W. Grupe and Charles H. Wurtzebach, all of whom were independent directors of Inland Diversified. Messrs. Daniels and Grupe and Dr. Wurtzebach comprised the independent special committee (the "Special Committee") appointed by the board of directors of Inland Diversified to evaluate, review of and negotiate various liquidity and strategic alternatives for Inland Diversified and to execute any transaction recommended by the Special Committee and approved by the board of Inland Diversified. The Special Committee considered and recommended approval of the Merger to the board of directors of Inland Diversified.

Effective July 1, 2014, the Board elected Mr. Daniels, Mr. Grupe and Dr. Wurtzebach as trustees of the Company. Dr. Wurtzebach was also appointed chairman of the Audit Committee of the Board. The Board has determined, after considering all of the relevant facts and circumstances known as of the date hereof, that each of Messrs. Daniels and Grupe and Dr. Wurtzebach is an independent trustee in accordance with the NYSE listing standards and the Company's Corporate Governance Guidelines.

Lee A. Daniels served as an independent director of Inland Diversified from September 2008 until the closing of the Merger and also served as the chairman of Inland Diversified's nominating and corporate governance committee and as a member of Inland Diversified's audit committee. Mr. Daniels has served as an independent director of Inland Real Estate Income Trust, Inc. since February 2012, and serves as a member of the Audit Committee of Inland Real Estate Income Trust, Inc. Mr. Daniels founded Lee Daniels & Associates, LLC, a consulting firm for government and community relations, in February 2007. From 2007 to 2012 Mr. Daniels was a principal in a commercial real estate firm. From 1992 to 2006, Mr. Daniels was an equity partner at the Chicago law firm of Bell Boyd & Lloyd, and previously had been an equity partner at Katten Muchin & Zavis from 1982 to 1991 and Daniels & Faris from 1967 to 1982. From 1971 to 1974, Mr. Daniels served as Special Assistant Attorney General for the State of Illinois. Mr. Daniels also served as a member of the Illinois House of Representatives from 1975 to 2007, and was Speaker of the Illinois House of Representatives from 1995 to 1997 and Minority Leader from 1983 to 1995 and 1998 to 2003. Mr. Daniels currently serves as the Chairman of Haymarket Center in Chicago (member since June 2010) and previously on the Board of Governors (1990
- 2013) and Healthcare Board of Trustees (1981 - 2013) for Elmhurst Memorial Hospital. Mr. Daniels also previously served on Boards of Directors of Suburban Bank of Elmhurst and Elmhurst Federal Savings and Loan Association.

Gerald W. Grupe served as an independent director of Inland Diversified from October 2009 until the closing of the Merger, and also served on Inland Diversified's nominating and corporate governance


committee. Mr. Grupe founded Ideal Insurance Agency, Inc., serving as president and chief executive officer from June 1980 to June 2009. Ideal provides insurance program administration, claims administration and related services to public and quasi-public entities in Illinois, including representing the Volunteer Firemen's Insurance Services, for which Mr. Grupe served as regional director from June 1974 to June 2009. Mr. Grupe retired from Ideal in June 2009. In addition, Mr. Grupe served as the chairman of the board of the Illinois Public Risk Fund from 1984 to June 2006 and served as its treasurer from June 2006 to June 2009.

Charles H. Wurtzebach, Ph.D., served as an independent director of Inland Diversified from May 2009 until the closing of the Merger, and also served on Inland Diversified's nominating and corporate governance committee and as chairman of Inland Diversified's audit committee. Dr. Wurtzebach is currently the George L. Ruff Professor in Real Estate Studies in the Department of Real Estate at DePaul University in Chicago, Illinois. Dr. Wurtzebach joined the faculty at DePaul University in January 2009. From 1999 to November 2008, Dr. Wurtzebach served as managing director and property chief investment officer of Henderson Global Investors (North America) Inc. Dr. Wurtzebach was president and chief executive officer of Heitman Capital Management from June 1994 to May 1998 and president of JMB Institutional Realty from June 1991 to June 1994. In addition, Dr. Wurtzebach was the Director of the Real Estate and Urban Land Economics program within the Graduate School of Business at the University of Texas at Austin from 1974 to 1986. Dr. Wurtzebach has co-authored or acted as co-editor of several books including Modern Real Estate, co-authored with Mike Miles, and Managing Real Estate Portfolios, co-edited with Susan Hudson-Wilson, and has authored numerous academic and professional articles. He currently serves as an independent director of the Board of Directors of RREEF Property Trust, Inc. where he also serves as the chairman of the audit committee.

In connection with their election as members of the Board, each of Messrs. Daniels and Grupe and Dr. Wurtzebach will be entitled to certain compensation that all of the Company's non-employee trustees receive, including:
(i) a $42,500 annual retainer paid, at the trustees' election, in cash, in common shares that will vest one year from the date of grant or in deferred share units that are fully vested on the date of grant , (ii) 3,000 restricted common shares that will vest one year from the date of grant, which were granted upon such trustees' initial election to the Board, and (iii) annual grants of restricted common shares with an aggregate value of $42,500 that will vest one year from the date of grant. The compensation described in clauses (i) and
(iii) above will be pro-rated for such trustees' service in 2014.

As non-employee trustees, each of Messrs. Daniels and Grupe and Dr. Wurtzebach may elect to defer eligible fee and retainer compensation until such time as his service on the Board is terminated, pursuant to the Company's Trustee Deferred Compensation Plan. Pursuant to the plan, equity compensation which is deferred vests immediately and is credited as a number of deferred share units to an . . .



Item 8.01 Other Events.

On July 1, 2014, the Company issued a press release announcing the closing of the Merger. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.



Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The required financial statements for the transaction described in Item 2.01 above will be filed under cover of a Form 8-K/A as soon as practicable and no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The required pro forma financial information for the transaction described in Item 2.01 above will be filed in accordance with Article 11 of Regulation S-X under cover of a Form 8-K/A as soon as practicable and no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.


(d) Exhibits.

Exhibit No.                                Description

2.1           Agreement and Plan of Merger by and among Kite Realty Group Trust, KRG
              Magellan, LLC and Inland Diversified Real Estate Trust, Inc., dated
              February 9, 2014 (incorporated by reference to Exhibit 2.1 to the
              Company's Current Report on Form 8-K filed with the Securities and
              Exchange Commission on February 11, 2014).

10.1          Fourth Amended and Restated Credit Agreement, dated as of July 1,
              2014, by and among the Operating Partnership, KeyBank National
              Association, as Administrative Agent, Bank of America, N.A., as
              Syndication Agent with respect to the Revolving Facility, Wells Fargo
              Bank, National Association, as Syndication Agent with respect to the
              Term Loan, Wells Fargo Bank, National Association and U.S. Bank
              National Association, as Co-Documentation Agents with respect to the
              Revolving Facility, JPMorgan Chase Bank, N.A., Bank of America, N.A.
              and U.S. Bank National Association, as Co-Documentation Agents with
              respect to the Term Loan, KeyBanc Capital Markets Inc. and Merrill
              Lynch, Pierce, Fenner & Smith Incorporated, as Co-Lead Arrangers with
              respect to the Revolving Facility, KeyBanc Capital Markets Inc. and
              Wells Fargo Securities, LLC, as Co-Lead Arrangers with respect to the
              Term Loan, and the other lenders party thereto.

10.2          Third Amended and Restated Guaranty, dated as of July 1, 2014, by KRG
              Magellan, LLC and certain subsidiaries of the Operating Partnership
              party thereto.

10.3          Springing Guaranty, dated as of July 1, 2014, by the Company.

99.1          Press release dated July 1, 2014.


  Add KRG to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for KRG - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.