Current Report Filing (8-k)
February 16 2023 - 6:05AM
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
February 14, 2023
DIVERSIFIED HEALTHCARE TRUST
(Exact Name of Registrant as Specified in
Its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
001-15319 |
|
04-3445278 |
(Commission File Number) |
|
(IRS Employer Identification No.) |
Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts
02458-1634
(Address of Principal Executive Offices) (Zip Code)
617-796-8350
(Registrant’s Telephone Number, Including
Area Code)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title Of Each Class |
|
Trading Symbol(s) |
|
Name Of Each Exchange
On Which Registered |
Common
Shares of Beneficial Interest |
|
DHC |
|
The
Nasdaq Stock Market LLC |
5.625%
Senior Notes due 2042 |
|
DHCNI |
|
The
Nasdaq Stock Market LLC |
6.25%
Senior Notes due 2046 |
|
DHCNL |
|
The
Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
In this Current Report on Form 8-K, the
terms “we”, “us”, and “our” refer to Diversified Healthcare Trust.
Item 1.01. Entry into a Material Definitive
Agreement.
On
February 14, 2023, we amended the agreement governing our credit facility, or our credit agreement, with Wells Fargo Bank, National Association,
as administrative agent and a lender, and a syndicate of other lenders. Pursuant to the amendment, among other things, the waiver of the
fixed charge coverage ratio covenant was extended through the maturity date of our credit facility in January 2024, the minimum liquidity
requirement was decreased from $200.0 million to $100.0 million, and the facility commitments were reduced from $586.4 million
to $450.0 million.
In
addition, the amendment provides for certain additional financial covenants and restrictions on us, including that we are required
to repay outstanding amounts under the credit facility with excess cash flow from properties that secure the credit facility and
that, subject to certain exceptions, we are generally restricted from acquiring real property or incurring additional debt and our
ability to pay cash distributions to our shareholders remains limited to amounts required to maintain our qualification for taxation
as a REIT, to avoid the payment of income or excise taxes and to pay a dividend of $0.01 per share per quarter. The amendment
also establishes the secured overnight financing rate as the replacement benchmark rate in place of LIBOR to calculate interest
payable on amounts outstanding under our credit facility, increases the interest rate premium payable on borrowings under our credit
facility from 250 basis points per annum to 290 basis points per annum and eliminates the
feature of our credit facility permitting us to reborrow funds.
Wells Fargo Bank, National
Association and the other lenders party to our credit agreement, as amended, as well as their affiliates, have engaged in, and may in
the future engage in, investment banking, commercial banking, advisory and other commercial dealings in the ordinary course of business
with us. They have received, and may in the future receive, customary fees and commissions for these engagements.
The foregoing description
of the amendment to our credit agreement is not complete and is subject to and qualified in its entirety by reference to the copy of the
fifth amendment to our amended and restated credit agreement attached as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated
herein by reference.
Warning Concerning Forward-Looking
Statements
This Current Report on
Form 8-K contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”,
“intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of
these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent,
beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially
from those contained in or implied by our forward-looking statements as a result of various factors. For example:
| · | Implications of the amendment could be that we will have sufficient liquidity under our credit agreement to fund our operations and repayment
of debt. We are currently fully drawn under our credit facility and could also be required to repay our
outstanding debt in the event of non-compliance with certain other requirements of our credit agreement or our senior unsecured
notes indentures or their supplements. In addition, we have no additional options to extend the maturity date of our credit
facility. We may therefore experience future liquidity constraints, as we are currently unable to incur additional debt under our
credit agreement or the agreements governing our public debt, and will be limited to cash on hand to fund our operations and
repayment of debt or we may be required to raise additional capital from other sources or take other measures to maintain adequate
liquidity; and |
| · | Actual costs under our credit facility will be higher than the stated rate plus a premium because of fees and expenses associated
with the facility. |
The information contained
in our filings with the SEC, including under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2021 identifies other important factors that could cause our actual results to differ materially from those stated in or
implied by our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue
reliance upon forward-looking statements.
Except as required by
law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
DIVERSIFIED HEALTHCARE TRUST |
|
|
|
By: |
/s/ Richard W. Siedel, Jr. |
|
Name: |
Richard W. Siedel, Jr. |
|
Title: |
Chief Financial Officer and Treasurer |
Date: February 15, 2023
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