InPoint Commercial Real Estate Income, Inc 8-K, filed May 8, 2023
InPoint Commercial Real Estate Income, Inc. (ICR-PA)
About this 8-K
InPoint Commercial Real Estate Income, Inc filed this 8-K on May 8, 2023, reporting on events of May 5, 2023.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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:
Securities registered pursuant to Section 12(b) of the Act:
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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.
Item 1.01 Entry into a Material Definitive Agreement.
The information set forth under Item 2.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed, on May 6, 2019, InPoint Commercial Real Estate Income, Inc. (the “Company”), through its wholly owned subsidiary, InPoint JPM Loan, LLC (the “Loan Subsidiary”), entered into an uncommitted master repurchase agreement (the “JPM Repo Facility”) with JPMorgan Chase Bank, National Association (“JPM”). The JPM Repo Facility initially provided for a maximum facility amount of $150,000,000 and had an initial maturity date of May 6, 2021, which maturity date was subsequently extended to May 6, 2023. In connection with the JPM Repo Facility, the Company entered into a guarantee agreement with JPM (the “Guarantee Agreement”), under which the Company agreed to guarantee certain obligations of the Loan Subsidiary under the JPM Repo Facility and to comply with certain financial covenants, including a covenant to maintain a ratio of earnings before interest, taxes, depreciation, and amortization to preferred dividends plus interest expense (the “Fixed Charges”) of 150% or greater on a trailing four-quarter basis.
On May 5, 2023, the Company, through the Loan Subsidiary, entered into an amendment to the JPM Repo Facility (the “JPM Repo Facility Amendment”) to (i) extend the maturity date of the JPM Repo Facility to May 6, 2026, with the option to extend the maturity date further to May 6, 2028 subject to two optional one-year extensions, and (ii) increase the maximum facility amount to $526,076,160 (the “Amended Maximum Facility Amount”).
In connection with the JPM Repo Facility Amendment, the Company also entered into an amendment to the Guarantee Agreement (the “Guarantee Amendment” together with the JPM Repo Facility Amendment, the “Amendments”) to (a) exclude preferred distributions paid to holders of the Company’s 6.75% Series A Cumulative Redeemable Preferred Stock from the calculation of the Fixed Charges and (b) amend the definition of “Liquidity” to include the Company’s liquidity lines with Inland Real Estate Investment Corporation and Sound Point Capital Management, LP.
The descriptions set forth above are qualified in their entirety by reference to the JPM Repo Facility Amendment and the Guarantee Amendment, copies of which are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K, the full text of each of which is incorporated herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. |
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10.1 |
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10.2 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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INPOINT COMMERCIAL REAL ESTATE INCOME, INC. |
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Date: |
May 8, 2023 |
By: |
/s/ Mitchell A. Sabshon |
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Mitchell A. Sabshon |
Exhibit 10.1
AMENDMENT NO. 2 TO MASTER REPURCHASE AGREEMENT
AMENDMENT NO. 2 TO MASTER REPURCHASE AGREEMENT, dated as of May 5, 2023 (this “Amendment”), between INPOINT JPM LOAN, LLC (“Seller”), a Delaware limited liability company, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association (the “Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).
RECITALS
WHEREAS, Seller and Buyer are parties to that certain Master Repurchase Agreement, dated as of May 6, 2019 (as amended by that certain Amendment No. 1 to Master Repurchase Agreement, dated as of April 14, 2021, as further amended by that certain Term SOFR Conforming Changes Amendment, dated as of December 31, 2021, as amended hereby, and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”).
WHEREAS, Seller and Buyer have agreed, subject to the terms and conditions hereof, that the Repurchase Agreement shall be amended as set forth in this Amendment.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer each agree as follows:
“Maturity Date” shall mean May 6, 2026 or the immediately succeeding Business Day, if such day shall not be a Business Day (the “Initial Maturity Date”), or such later date as may be in effect pursuant to Article 3(n) hereof. For the sake of clarity, the Maturity Date shall not be any date beyond May 6, 2028 (the “Final Maturity Date”).
“Maximum Facility Amount” shall mean $526,076,160.
“Second Amendment Effective Date”: shall mean May 5, 2023.
“Second Amendment Structuring Fee”: shall have the meaning specified in the Fee Letter.
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(n)(i) Notwithstanding the definition of Maturity Date herein, upon written request of Seller prior to the then current Maturity Date, provided that Buyer has determined that all of the extension conditions listed in clause (ii) below (collectively, the “Maturity Date Extension Conditions”) shall have been satisfied, Buyer may, in its sole discretion, agree to extend the Maturity Date for a period of up to three hundred sixty-four (364) additional days each, on up to two occasions for up to two consecutive such periods (the “Extension Period”) by giving notice to Seller of such extension; provided, that any failure by Buyer to deliver such notice of extension to Seller within thirty (30) days from the date first received by Buyer shall be deemed a denial of Seller’s request to extend such Maturity Date. Notwithstanding anything to the contrary in this Article 3(n)(i) hereof, and in no event shall the Final Maturity Date be after May 6, 2028.
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[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
a national banking association organized under the laws of the United States
By: /s/ Thomas N. Cassino
Name: Thomas N. Cassino
Title: Managing Director
JPM-InPoint - Signature Page to Amendment to Master Repurchase Agreement
SELLER:
INPOINT JPM LOAN, LLC, a Delaware limited liability company
By: /s/ Jason Fruchtman
Name: Jason Fruchtman
Title: Authorized Signatory
JPM-InPoint - Signature Page to Amendment to Master Repurchase Agreement
Acknowledged and Agreed:
InPoint Commercial Real Estate Income, Inc., a Maryland corporation, in its capacity as Guarantor, and solely for purposes of acknowledging and agreeing to the terms of this Amendment:
By: /s/ Jason Fruchtman
Name: Jason Fruchtman
Title: Authorized Signatory
JPM-InPoint - Signature Page to Amendment to Master Repurchase Agreement
Exhibit 10.2
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT
AMENDMENT NO. 1 TO GUARANTEE AGREEMENT, dated as of May 5, 2023 (this “Amendment”), between INPOINT COMMERCIAL REAL ESTATE INCOME, INC., a Maryland corporation (the “Guarantor”), a Delaware limited liability company, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association (the “Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).
RECITALS
WHEREAS, InPoint JPM Loan, LLC, a Delaware limited liability company (the “Seller”) and Buyer are parties to that certain Master Repurchase Agreement, dated as of May 6, 2019 (as amended by that certain Amendment No. 1 to Master Repurchase Agreement, dated as of April 14, 2021, as further amended by that certain Term SOFR Conforming Changes Amendment, dated as of December 31, 2021, as further amended by that certain Amendment No. 2 to Master Repurchase Agreement, dated as of May 5, 2023, and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”).
WHEREAS, in connection with the Repurchase Agreement, Guarantor executed and delivered in favor of Buyer that certain Guarantee Agreement, dated as of May 6, 2019 (as amended hereby, and as further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Guarantee Agreement”).
WHEREAS, Guarantor and Buyer have agreed, subject to the terms and conditions hereof, that the Repurchase Agreement shall be amended as set forth in this Amendment.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer each agree as follows:
“Inland Liquidity Line Letter” shall mean that certain liquidity line letter between Inland Real Estate Investment Corporation, as lender and Guarantor, as borrower, dated as of July 20, 2021, by which Inland Real Estate Investment Corporation agreed to make revolving credit loans to Guarantor in an amount not to exceed the Commitment (as defined therein).
“Investor” shall mean, singularly or collectively as context may require, (i) Inland Real Estate Investment Corporation pursuant to its obligations under the Inland
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Liquidity Line Letter and (ii) Sound Point Capital Management, LP pursuant to its obligations under the Sound Point Liquidity Line Letter.
“Qualified Capital Commitments” shall mean, as of such date of determination, the amount of any unpledged, unencumbered, unfunded, irrevocable capital commitments of the Investors of Guarantor that are available to be called as of right by Guarantor (or have been validly called on but have not yet been funded) without condition (other than customary notice requirements) but excluding any capital commitment of any Investor with respect to which any of the following events has occurred: (i) a failure of the applicable Investor to pay any portion of its capital commitment to Guarantor when such payment is due; (ii) Guarantor has determined in good faith that the related Investor may be unlikely to pay any portion of its capital commitment to Guarantor when such payment is due; (iii) the applicable Investor becoming the subject of any bankruptcy or other insolvency proceeding or the appointment of a receiver in respect thereof; (iv) the repudiation by the applicable Investor of all or any portion of its capital commitment to Guarantor; (v) the applicable Investor withdrawing, in whole or in part, as an Investor in Guarantor in accordance with the applicable partnership, limited liability company or other constitutive agreement; or (vi) the release or termination of the applicable Investor’s capital commitment to Guarantor by such Investor, Guarantor, its general partner or its managing member. For purposes of this definition, any pledge or encumbrance of an Investor’s capital commitments pursuant to a subscription finance facility shall only be deemed pledged and encumbered in an amount up to the current unpaid principal balance of such subscription finance facility such that the net amount of Investor capital commitments over and above the current unpaid principal balance of such subscription finance facility shall be included as Qualified Capital Commitments for purposes of this Guarantee.
“Sound Point Liquidity Line Letter” shall mean that certain liquidity line letter between Sound Point Capital Management, LP, as lender and Guarantor, as borrower, dated as of July 15, 2021, by which Sound Point Capital Management, LP agreed to make revolving credit loans to Guarantor in an amount not to exceed the Commitment (as defined therein).
“Fixed Charges” shall mean, with respect to Guarantor and its Consolidated Subsidiaries and any fiscal quarter, determined without duplication on a consolidated basis, the sum of (a) all scheduled principal amortization payments, interest, fees and other debt service payable by such Person and its Consolidated Subsidiaries during such fiscal quarter, (b) all preferred dividends payable by such Person and its Consolidated Subsidiaries during such fiscal quarter (but, for the avoidance of doubt, not including (i) any dividends payable in respect of the 3,500,000 shares of 6.75% Series A Cumulative Redeemable Preferred Stock in InPoint Commercial Real Estate Income, Inc., issued pursuant to the Prospectus dated September 15, 2021, or (ii) any dividend distributions on common shares of
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such Person or its Consolidated Subsidiaries), (c) Capitalized Lease Obligations paid or accrued during such fiscal quarter, (d) capital expenditures (if any) incurred by such Person and its Consolidated Subsidiaries during such fiscal quarter, and (e) any amounts payable during such fiscal quarter under any ground lease.
“Liquidity” shall mean, with respect to Guarantor and any date, the sum of (a) the amount of Cash and Cash Equivalents (in each case, other than restricted cash) held by Guarantor, (b) the total unrestricted, immediately available borrowing capacity which may be drawn (not including required reserves, fees and discounts) upon by Guarantor without condition (except for customary notice conditions) (and to the extent not otherwise pledged to any other Person) under any unsecured term or revolving credit facilities of Guarantor (but only to the extent that no default or event of default exists thereunder) which are made available by financial institutions whose short term unsecured debt is rated at least “A-1” by S&P and “P-1” by Moody’s, and has an equivalent or higher rating by each other nationally recognized statistical rating organization that provides a short-term unsecured debt rating to such financial institution, and whose long term unsecured debt is rated at least “A+” by S&P and “A1” by Moody’s and has an equivalent or higher rating by each other nationally recognized statistical rating organization that provides a long-term unsecured debt rating to such financial institution and (c) Qualified Capital Commitments.
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[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
a national banking association organized under the laws of the United States
By: /s/ Thomas N. Cassino
Name: Thomas N. Cassino
Title: Managing Director
JPM-InPoint - Signature Page to Amendment to Guarantee Agreement
GUARANTOR:
InPoint Commercial Real Estate Income, Inc., a Maryland corporation
By: /s/ Jason Fruchtman
Name: Jason Fruchtman
Title: Authorized Signatory
JPM-InPoint - Signature Page to Amendment to Guarantee Agreement