Netstreit Corp.
09/29/2025 | Press release | Distributed by Public on 09/29/2025 14:04
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01. Entry into Material Definitive Agreements.
On September 25, 2025 (the "Closing Date"), NETSTREIT, L.P. (the "Borrower") and NETSTREIT Corp. (the "Company") entered a Term Loan Agreement (the "PNC Term Loan Agreement"), by and among the Borrower, the Company, the several institutions party thereto, as lenders, and PNC Bank, National Association ("PNC"), as Administrative Agent.
The PNC Term Loan Agreement provides for (i) a $200.0 million senior unsecured, 5.5-year term loan facility (the "2031 Term Loan"), all of which was funded on the Closing Date, and (ii) a $250.0 million senior unsecured, 7-year term loan facility (the "2032 Term Loan"), of which $100.0 million was funded on the Closing Date and the remaining $150.0 million will be available as a delayed draw term loan commitment (the "Delayed Draw Term Loan Commitment") until September 25, 2026 (the 2031 Term Loan and 2032 Term Loan, collectively, the "PNC Term Loans"). The 2031 Term Loan matures on March 25, 2031 and is repayable at the Borrower's option in whole or in part without premium or penalty. The 2032 Term Loan matures on September 24, 2032 and is repayable at the Borrower's option in whole or in part, subject to a prepayment premium equal to (i) 2.0% of any amount repaid during the first year following the Closing Date, (ii) 1.0% of any amount repaid during the second year following the Closing Date.
Pursuant to the PNC Term Loan Agreement, the Company and certain material subsidiaries of the Borrower entered into a guarantee agreement providing for the guarantee of the obligations under the PNC Term Loan Agreement and certain hedging and cash management obligations of the Company and its subsidiaries.
The interest rate under the PNC Term Loan Agreement is determined by the Company's Investment Grade Rating status and consolidated total leverage ratio. Prior to the date the Company obtains an Investment Grade Rating, interest rates are based solely on the Company's consolidated total leverage ratio, and are determined by (A) in the case of the 2031 Term Loan, either (i) SOFR, plus a margin ranging from 1.15% to 1.60%, based on the Company's consolidated total leverage ratio, or (ii) a Base Rate, plus a margin ranging from 0.15% to 0.60%, based on the Company's consolidated total leverage ratio and (B) in the case of the 2032 Term Loan, either (i) SOFR, plus a margin ranging from 1.50% to 2.20%, based on the Company's consolidated total leverage ratio, or (ii) a Base Rate, plus a margin ranging from 0.50% to 1.20%, based on the Company's consolidated total leverage ratio.
After the date the Company obtains an Investment Grade Rating, interest rates are based on the Company's Investment Grade Rating and its consolidated total leverage ratio, and are determined by (A) in the case of 2031 Term Loan either (i) SOFR, plus a margin ranging from 0.80% to 1.60%, based on the Company's Investment Grade Rating and consolidated total leverage ratio, or (ii) a Base Rate, plus a margin ranging from 0.00% to 0.60%, based on the Company's Investment Grade Rating and consolidated total leverage ratio and (B) in the case of the 2032 Term Loan either (i) SOFR, plus a margin ranging from 1.15% to 2.20%, based on the Company's Investment Grade Rating and consolidated total leverage ratio, or (ii) a Base Rate, plus a margin ranging from 0.15% to 1.20%, based on the Company's Investment Grade Rating and consolidated total leverage ratio.
The Delayed Draw Term Loan Commitment will accrue a ticking fee of 0.20% per annum from the date which is 90 days following the Closing Date until the last day of the availability period.
The Company has fully hedged the 2031 Term Loan with an all-in interest rate, as of October 1, 2025, of 4.59% per annum. The Company has partially hedged $200.0 million of the 2032 Term Loan at an all-in interest rate, as of October 1, 2025, of 4.92% per annum. Interest is payable monthly or at the end of the applicable interest period in arrears on any outstanding borrowings. The remaining $50.0 million of the 2032 Term Loan is currently unhedged.
The PNC Term Loan Agreement contains customary representations and warranties, which include customary materiality, material adverse effect and knowledge qualifiers. The PNC Term Loan Agreement contains customary affirmative and negative covenants including, among other requirements, negative covenants that restrict the Company's and its subsidiaries' ability to create liens, and that restrict its subsidiaries' ability to incur certain indebtedness. Further, the PNC Term Loan Agreement contains a number of financial covenants including, among others, the maintenance of a maximum leverage ratio, a fixed charge coverage ratio, a secured leverage ratio and a minimum tangible net worth.
The PNC Term Loan Agreement contains events of default that include, among others, non-payment of principal, interest or fees, breach of covenants, inaccuracy of representations and warranties, cross defaults to certain other indebtedness, bankruptcy and insolvency events with respect to the Company and certain of its subsidiaries, material judgments, and events constituting a change of control. Upon the occurrence and during the continuance of an event of default, the lenders under the PNC Term Loan Agreement may accelerate the obligations thereunder; however, acceleration will be automatic in the case of bankruptcy and insolvency events of default involving the Company.
On the Closing Date, the Borrower and the Company also entered into amendments (collectively, the "Amendments") to: (i) that certain Second Amended and Restated Credit Agreement, dated as of January 15, 2025 (the "Wells Fargo Credit Agreement"), by and among the Borrower, the Company, the several institutions party thereto, as lenders, and Wells Fargo Bank, National Association ("Wells Fargo"), as Administrative Agent, (ii) that certain Amended and Restated Credit Agreement, dated as of January 15, 2025 (the "PNC Credit Agreement"), by and among the Borrower, the Company, the several institutions party thereto, as lenders, and PNC, as Administrative Agent; and (iii) that certain Term Loan Agreement, dated as of July 3, 2023 (as amended by that certain First Amendment to Term Loan Agreement, dated as of January 15, 2025, the "Truist Term Loan Agreement"), by and among the Borrower, the Company, the several institutions party thereto, as lenders, and Truist Bank, National Association ("Truist"), as Administrative Agent. The Amendments implemented certain conforming changes to each of the Wells Fargo Credit Agreement, the PNC Credit Agreement and the Truist Term Loan Agreement (collectively, the "Existing Credit Agreements"), including, without limitation, removing the SOFR credit spread adjustment.
Pursuant to each Amendment, the Company and certain material subsidiaries of the Borrower reaffirmed their guarantee of the obligations under each of the Existing Credit Agreements and certain hedging and cash management obligations of the Company and its subsidiaries thereunder.
The foregoing description of the PNC Term Loan Agreement and the Amendments is not complete and is qualified in its entirety by reference to the PNC Term Loan Agreement, the Amendment to the Wells Fargo Credit Agreement, the Amendment to the PNC Credit Agreement and the Amendment to the Truist Term Loan Agreement filed herewith as Exhibit 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K, and each such exhibit is incorporated herein by reference.
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 herein by reference.
Netstreit Corp. published this content on September 29, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on September 29, 2025 at 20:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]