Griffin-American adds one-year covenant modification period

By Wendy Van Sickle

Columbus, Ohio, Aug. 3 – Griffin-American Healthcare REIT III Holdings, LP amended its credit agreement dated Jan. 31, 2019 with Bank of America, NA as administrative agent on July 28, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement, which provides for a $150 million revolver and a $480 million term loan, was amended to revise its to financial covenant calculations to exclude the assets, liabilities and operating performance of the company’s indirect, majority-owned subsidiary, Trilogy REIT Holdings, LLC or any subsidiary thereof.

Additionally, a covenant modification period was added that began on June 30 and runs through the earlier of June 30, 2021 or the date Griffin delivers written notice to end the covenant modification period.

During the modification period, the following changes will be in place:

• An increased consolidated leverage ratio equal to or less than 65%;

• Changes to the applicable interest rate based on revisions to the consolidated leverage ratio pricing grid;

• An increased consolidated unencumbered leverage ratio equal to or less than 65%;

• Revisions to the consolidated tangible net worth and EBITDAR coverage requirements;

• The inclusion of a Libor floor;

• The operating partnership to pledge the equity interests in each direct and indirect subsidiary that owns an unencumbered asset;

• The removal of swingline loans;

• Updates regarding restrictions and limitations on certain investments during the remainder of the term of the credit facility, which matures on Jan. 25, 2022;

• Clarifications regarding events triggering a fundamental change; and

• A restriction on the payment of distributions and share repurchases.

As of July 28, borrowing capacity under the credit agreement was $630 million, and there were $591 million of borrowings outstanding.

Griffin-American is an Irvine, Calif.-based real estate investment trust building a portfolio of health care real estate assets.

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