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ESRT > SEC Filings for ESRT > Form 8-K on 12-Aug-2014All Recent SEC Filings

Show all filings for EMPIRE STATE REALTY TRUST, INC.

Form 8-K for EMPIRE STATE REALTY TRUST, INC.


12-Aug-2014

Entry into a Material Definitive Agreement, Creation of a Direct


Item 1.01 Entry into a Material Definitive Agreement.

The Indenture and Notes

On August 12, 2014, Empire State Realty OP, L.P., a Delaware limited partnership and operating partnership (the "Operating Partnership") of Empire State Realty Trust, Inc., a Maryland corporation (the "Company"), completed its previously announced private placement of $250 million principal amount of 2.625% Exchangeable Senior Notes due 2019 (the "Notes"). The Notes are governed by the terms of an indenture, dated as of August 12, 2014 (the "Indenture"), by and among the Company, the Operating Partnership and Wilmington Trust, National Association, as trustee (the "Trustee").

The net proceeds from the offering of the Notes were approximately $247.0 million, after deducting fees and estimated expenses payable by the Operating Partnership. The Operating Partnership expects to use the net proceeds from the offering to reduce amounts outstanding under its revolving credit facility, including amounts used to finance its recent property acquisitions and to repay mortgage debt.

The Notes are the senior unsecured obligations of the Operating Partnership and bear interest at a rate of 2.625% per annum, payable semi-annually in arrears on August 15 and February 15 of each year, commencing February 15, 2015. The Notes will mature on August 15, 2019, unless earlier repurchased, redeemed or exchanged.

At any time prior to the close of business on the business day immediately preceding May 15, 2019, holders may exchange their Notes at their option only under the following circumstances: (1) during any calendar quarter beginning after September 30, 2014 (and only during such quarter) if the closing sale price of the Class A common stock, $0.01 par value per share, of the Company, which common stock we refer to as ESRT common stock, is more than 130% of the then-current exchange price for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading days ending on the last trading day of the previous calendar quarter; (2) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price per $1,000 principal amount of Notes for each trading day during such five trading-day period was less than 98% of the closing sale price of ESRT common stock, for each trading day during such five trading-day period multiplied by the then current exchange rate; (3) if the Operating Partnership calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions. On or after May 15, 2019, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may exchange their Notes at any time, regardless of the foregoing circumstances.

Upon exchange of Notes, the Operating Partnership will pay or deliver, as the case may be, cash, shares of ESRT common stock or a combination of cash and shares of ESRT common stock, at the Operating Partnership's election, at an initial exchange rate of 51.4059 shares per $1,000 principal amount of Notes, which corresponds to an initial exchange price of approximately $19.45 per share of ESRT common stock and represents an exchange premium of approximately 22.5% based on the last reported sale price of ESRT common stock of $15.88 on August 6, 2014, the date the Notes offering was priced. The exchange rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of certain stock dividends on ESRT common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, the payment of cash dividends in excess of $0.085 per share per fiscal quarter and certain issuer tender or exchange offers.


The Operating Partnership may not redeem the Notes prior to their maturity date, except to the extent, but only to the extent necessary to preserve the Company's status as a real estate investment trust, and no "sinking fund" is provided for the Notes, which means that the Operating Partnership is not required to periodically redeem or retire the Notes.

Upon the occurrence of fundamental changes described in the Indenture, holders of the Notes may require the Operating Partnership to repurchase for cash all or part of their Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Upon the occurrence of any make-whole fundamental change described in the indenture, the exchange rate for holders who exchange their notes in connection with any such make-whole fundamental change may be increased.

The Indenture does not contain any financial or maintenance covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries, including the Operating Partnership. The Indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company or the Operating Partnership) occurs and is continuing, the Trustee by notice to the Operating Partnership, or the holders of at least 25% in principal amount of the outstanding Notes by written notice to the Operating Partnership and the Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company or the Operating Partnership, 100% of the principal of and accrued and unpaid interest, if any, on all of the Notes will become due and payable automatically. Notwithstanding the foregoing, the Indenture provides that, to the extent the Operating Partnership elects, and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company and the Operating Partnership to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Notes.

The foregoing description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the Indenture and form of Note, which are filed hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference.

Registration Rights Agreement

On August 12, 2014, in connection with the issuance and sale of the Notes, the . . .



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

The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.



Item 3.02 Unregistered Sales of Equity Securities.

The Notes were sold to the Initial Purchaser in reliance on the exemption from the registration requirements provided by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), for resale to qualified institutional buyers pursuant to Rule 144A of the Securities Act. The Operating Partnership does not intend to file a shelf registration statement for the resale of the Notes. The information set forth in Item 1.01 is incorporated by reference into this Item 3.02.



Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit
  No.                                     Description

 4.1         Indenture, dated August 12, 2014, by and among Empire State Realty OP,
             L.P., as issuer, Empire State Realty Trust, Inc., and Wilmington
             Trust, National Association, as trustee.

 4.2         Form of Global Note representing the Operating Partnership's 2.625%
             Exchangeable Senior Notes due 2019 (included in Exhibit 4.1).

10.1         Registration Rights Agreement, dated August 12, 2014, by and among
             Empire State Realty OP, L.P., Empire State Realty Trust, Inc. and
             Goldman, Sachs & Co.


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