NMRK 8-K
Newmark Group, Inc. (NMRK)
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
Date of Report (Date of earliest event reported):
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) |
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 |
Name of each exchange On which registered | ||
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 disclosures set forth in Item 8.01 of this Current Report on Form 8-K are 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 disclosures set forth in Item 8.01 of this Current Report on Form 8-K are incorporated herein by reference.
| Item 8.01. | Other Events. |
On December 20, 2023, Newmark Group, Inc. (“Newmark” or the “Company”) entered into a First Amendment (the “First Amendment”) to the Credit Agreement, dated as of November 30, 2018 (as amended, the “Cantor Credit Agreement”), between Newmark and Cantor Fitzgerald, L.P., the Company’s majority stockholder (“Cantor”). The First Amendment was approved by both the Board of Directors and the Audit Committee of the Company.
The Cantor Credit Agreement provides for each party or its subsidiaries to make loans to the other party or its subsidiaries in the lender’s discretion. Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC Group, Inc. and its subsidiaries) may borrow up to an aggregate principal amount of $250.0 million from each other from time to time at an interest rate which is the higher of Cantor’s or Newmark’s short-term borrowing rate then in effect, plus 1.0%, with such borrowings payable at either the specified due date or the maturity of the Cantor Credit Agreement, which is the earlier of the termination of the Cantor Credit Agreement or, if notice of non-extension is given by either party six months in advance, the then-following November 30. As of December 20, 2023, there were no borrowings outstanding under the Cantor Credit Agreement.
Pursuant to the First Amendment, Cantor has agreed to make certain loans to Newmark from time to time in an aggregate outstanding principal amount of up to $150.0 million under the Cantor Credit Agreement (the “Newmark Revolving Loans”). The Newmark Revolving Loans have substantially the same terms as other loans under the Cantor Credit Agreement, except as described in the following paragraph. As of December 20, 2023, borrowings under the Credit Facility bear interest at a rate equal to 6.96% per annum. As of December 20, 2023, the applicable interest rate for Newmark Revolving Loans would be 6.71%, as described in further detail below.
Until April 15, 2024, the Newmark Revolving Loans will bear interest at a rate equal to 25 basis points less than the interest rate borne by the revolving loans made pursuant to that certain Amended and Restated Credit Agreement, dated as of March 10, 2022, among the Company, as borrower, the financial institutions from time to time party thereto as lenders, and Bank of America, N.A., as administrative agent and L/C issuer (the “Credit Agreement”). The Credit Agreement provides for a $600.0 million unsecured senior revolving credit facility (the “Credit Facility”). Borrowings under the Credit Facility bear interest at a per annum rate equal to, at the Company’s option, either (a) Term SOFR (as defined in the Credit Agreement) for interest periods of one or three months, as selected by the Company, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.50%, (ii) the prime rate, and (iii) Term SOFR plus 1.00%, in each case plus an applicable margin. The applicable margin will initially be 1.50% with respect to Term SOFR borrowings in (a) above and 0.50% with respect to base rate borrowings in (b) above. The applicable margin with respect to Term SOFR borrowings in (a) above will range from 1.00% to 2.125% depending upon the Company’s credit rating, and with respect to base rate borrowings in (b) above will range from 0.00% to 1.125% depending upon the Company’s credit rating. Unlike other loans made under the Cantor Credit Agreement, Cantor may demand repayment of the Newmark Revolving Loans prior to the final maturity date upon three business days’ prior written notice.
In addition, on December 20, 2023, the Company executed a consent letter (the “Consent Letter”) with respect to that certain Delayed Draw Term Loan Credit Agreement, dated as of August 10, 2023 (the “DDTL Credit Agreement”), by and among the Company, as borrower, the several financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent. Pursuant to the Consent Letter, the lenders party to the DDTL Credit Agreement consented to allowing the Company to incur indebtedness from time to time pursuant to the Cantor Credit Agreement without triggering the mandatory prepayment requirements set forth in Section 2.05(b) of the DDTL Credit Agreement.
On December 20, 2023, the Company provided notice to Cantor to borrow $130.0 million of Newmark Revolving Loans available under the Cantor Credit Agreement, with the funds expected to be made available on or about December 22, 2023. The Company intends to use the proceeds from such borrowing, along with cash on hand, to repay the principal and interest related to all of the remaining balance under the Credit Facility. As of December 20, 2023, Newmark’s total senior debt outstanding was $550.0 million, which consisted of $420.0 million of borrowings pursuant to a term loan under the DDTL Credit Agreement and $130.0 million of borrowings under the Credit Facility. As of September 30, 2023, the Company’s total senior debt outstanding was $605.0 million, consisting of $550.0 million aggregate principal amount of its 6.125% Senior Notes due 2023 (which were paid at maturity on November 15, 2023 with the proceeds of the term loan under the DDTL Credit Agreement and draws under the Credit Facility), and $55.0 million of borrowings under the Credit Facility.
The foregoing descriptions of the First Amendment and the Consent Letter do not purport to be complete and are qualified in their entirety by reference to the actual terms of the First Amendment and Consent Letter, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.
Discussion of Forward-Looking Statements about Newmark
Statements in this document regarding Newmark that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company’s business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark’s Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.
| Item 9.01 | Financial statements and Exhibits |
| (d) | Exhibits |
The exhibit index set forth below is incorporated by reference in response to this Item 9.01.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| Newmark Group, Inc. | ||||||
| Date: December 21, 2023 | By: | /s/ Howard W. Lutnick | ||||
| Name: | Howard W. Lutnick | |||||
| Title: | Executive Chairman | |||||
[Signature Page to Form 8-K regarding First Amendment to Cantor Credit Agreement and Consent Letter
Relating to Credit Agreement dated December 21, 2023]
Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of December 20, 2023 (the “First Amendment Effective Date”), by and between Newmark Group, Inc., a Delaware corporation (“Newmark”) and Cantor Fitzgerald, L.P., a Delaware limited partnership (“Cantor”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement (as defined below).
RECITALS
WHEREAS, Newmark and Cantor, are parties to that certain Credit Agreement, dated as of November 30, 2018 (as amended, restated, amended and restated, extended, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”);
WHEREAS, Newmark and Cantor desire to make certain amendments to the Credit Agreement, in each case, in accordance with and subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendments to the Credit Agreement.
(a) The defined term “Applicable Rate” in Section 1 of the Credit Agreement shall be amended in its entirely to read as follows:
“Applicable Rate” shall mean, (a) with respect to Bilateral Loans, for any Rate Period, the higher of Newmark’s or Cantor’s short-term borrowing rate in effect at such time plus 100 basis points (1.00%) and (b) with respect to Newmark Loans (i) for any Rate Period ending on or before April 15, 2024, the interest rate then in effect for revolving loans under the Newmark RCF Credit Agreement less 25 basis points (0.25%) and (ii) for any other Rate Period, the higher of Newmark’s or Cantor’s short-term borrowing rate in effect at such time plus 100 basis points (1.00%). The Applicable Rate for each Rate Period shall be reasonably determined by the Lender in accordance herewith, and the Lender shall advise the Borrower of such determination.
(b) Section 1 of the Credit Agreement shall be amended to add the following defined term after the definition of “Note” and before the definition of “Obligations”:
“Newmark RCF Credit Agreement” means that certain Amended and Restated Credit Agreement, dated as of March 10, 2022 by and among Newmark, as borrower, certain subsidiaries of Newmark, as guarantors, Bank of America, N.A., as administrative agent and the lenders from time to time party thereto, as may be amended, restated, supplemented or otherwise modified from time to time.
(c) Section 2.1(a) of the Credit Agreement is amended in its entirety to read as follows:
(a) Loans; Maturity. Subject to satisfaction of the conditions set forth in Section 3 hereof, (i) a Lender may, on the terms and conditions set forth in this Agreement and to the extent such Lender has sufficient cash available, in its sole discretion, make loans and advances (each, a “Bilateral Loan”) to the Borrower at such Borrower’s request from time to time starting on the Effective Date and ending on the Maturity Date and (ii) Cantor agrees on
the terms and conditions set forth in this Agreement to make loans and advances to Newmark at Newmark’s request in an aggregate principal amount not to exceed $150,000,000 (the “Newmark Loans” and together with the Bilateral Loans, the “Loans”) starting on the First Amendment Effective Date and ending on the Maturity Date; provided that the aggregate principal amount of all Loans outstanding pursuant to this Agreement with respect to a Party and its subsidiaries shall not exceed $250 million at any time. Each Loan together with all accrued but unpaid interest thereon shall be due and payable on such date prior to the Maturity Date as may be mutually agreed between the Borrower and the Lender with respect to such Bilateral Loan; provided each Newmark Loan together with all accrued but unpaid interest thereon shall be due and payable on the earlier of the date on which Cantor demands repayment of such loan in accordance with Section 2.4(b) and the Maturity Date. If no due date is specified, then each Borrower shall repay the aggregate outstanding principal amount of each Bilateral Loan together with all accrued but unpaid interest thereon and all other amounts owing under this Agreement or the other Loan Documents in full on the Maturity Date. Subject to the terms and conditions hereof, at any time prior to the Maturity Date, Newmark may borrow the Newmark Loans under this Section 2.1(a), repay the Newmark Loans under Section 2.4 and reborrow the Newmark Loans under this Section 2.1(a).
(d) Section 2.4 of the Credit Agreement is amended in its entirety to read as follows:
(a) Voluntary. Subject to the requirements of this Section 2.4(a), each Borrower shall have the right from time to time, on any Business Day, to prepay any Loan in whole or in part. All prepayments shall be accompanied by accrued interest on the amount prepaid plus any cost incurred by the applicable Lender as a result of such prepayment.
(b) Mandatory. Newmark shall be required to prepay all or a portion of the outstanding Newmark Loans upon three (3) Business Days’ prior written notice from Cantor; provided that such Newmark Loans may be reborrowed pursuant to Section 2.1(a) so long as the Newmark Maturity Date has not occurred.
2. Representations and Warranties. Each Party hereby represents and warrants to the other that:
(a) This Amendment has been duly and validly executed by such Party and constitutes the legal, valid, and binding obligations of such Party, enforceable against such Person in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization or similar laws generally affecting the enforcement of the rights of creditors.
(b) After giving effect to this Amendment, the representations and warranties of such Parties contained in Section 4 of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) on and as of the First Amendment Effective Date, except to the extent that such representation and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they were true and correct in all respects) as of such earlier date.
2
3. First Amendment Effective Date Conditions. This Amendment shall become effective on the First Amendment Effective Date upon receipt of the Parties of a copy of this Amendment duly executed by Cantor and Newmark.
4. Miscellaneous.
(a) Amended Terms. On and after the First Amendment Effective Date, all references to the Credit Agreement shall hereafter mean the Credit Agreement as amended by all terms of this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.
(b) Counterparts. This Amendment may be executed in any number of separate counterparts, all of which, when taken together, shall constitute one and the same instrument, notwithstanding the fact that all parties did not sign the same counterpart.
(c) GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
[Signature page follows.]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first above written.
| NEWMARK GROUP, INC., a Delaware corporation | ||
| By: | /s/ Michael Rispoli | |
| Name: | Michael Rispoli | |
| Title: | Chief Financial Officer | |
[Signature page to First Amendment to Newmark-Cantor Intercompany Credit Agreement]
| Cantor Fitzgerald, L.P., a Delaware limited partnership | ||
| By: | /s/ Danny Salinas | |
| Name: | Danny Salinas | |
| Title: | Chief Financial Officer | |
[Signature page to First Amendment to Newmark-Cantor Intercompany Credit Agreement]
Exhibit 10.2
EXECUTION VERSION
December 20, 2023
Newmark Group, Inc.
125 Park Avenue
New York, New York 10017
Attention: Michael Rispoli, Chief Financial Officer
| Re: | Mandatory Prepayment Exclusion |
Ladies and Gentlemen:
Reference is hereby made to that certain Delayed Draw Term Loan Credit Agreement, dated as of August 10, 2023 (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Newmark Group, Inc., a Delaware corporation (the “Borrower”), the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as the Administrative Agent. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement.
The Borrower has requested that, notwithstanding the limitations set forth in Section 2.05(b) of the Credit Agreement, the Lenders party hereto consent to the exclusion of Indebtedness incurred from time to time by the Borrower or any Subsidiary pursuant to that certain Credit Agreement, dated as of November 30, 2018, by and between the Borrower and Cantor Fitzgerald, L.P., a Delaware limited partnership, as may be amended, restated, supplemented or otherwise modified from time to time, from the mandatory prepayment requirement set forth in Section 2.05(b) of the Credit Agreement (the “Mandatory Prepayment Exclusion”).
Subject to the terms and conditions set forth herein, the Lenders party hereto hereby consent to the Mandatory Prepayment Exclusion, notwithstanding the limitations set forth in Section 2.05(b) of the Credit Agreement. Except for the specific consent set forth in this paragraph, nothing contained herein shall be construed to be a modification of the Credit Agreement or any other Loan Document or deemed to constitute a waiver of (a) any rights or remedies the Administrative Agent or any Lender may have under the Credit Agreement or any other Loan Document or under applicable Law, or (b) the Borrower’s obligation to comply fully with any duty, term, condition, obligation, or covenant contained in the Credit Agreement or any other Loan Document. The consent set forth in this paragraph is a one-time consent, is effective only with respect to the matters set forth above, and shall not obligate the Administrative Agent or any Lender to provide any future consent under the Loan Documents. This letter agreement (this “Consent Letter”) shall not establish a custom or course of dealing or conduct between the Administrative Agent or any Lender and the Borrower.
This Consent Letter shall become effective upon the Administrative Agent’s receipt of counterparts hereof duly executed by the Lenders constituting the Required Lenders which is accepted and agreed by the Borrower and the Administrative Agent.
The Borrower represents and warrants to the Administrative Agent and the Lenders that the representations and warranties of the Borrower contained in Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) on and as of the date hereof, except to the extent that such representation and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they were true and correct in all respects) as of such earlier date.
Except as set forth in this Consent Letter, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. This Consent Letter is a Loan Document. Subject to Section 11.17 of the Credit Agreement, this Consent Letter may be in the form of an Electronic Record and may be executed using Electronic Signatures (including facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. This Consent Letter may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Consent Letter. The authorization under this paragraph may include use or acceptance by the Administrative Agent and each Lender of a manually signed paper copy of this Consent Letter which has been converted into electronic form (such as scanned into .pdf format), or an electronically signed copy of this Consent Letter converted into another format, for transmission, delivery and/or retention.
THIS CONSENT LETTER AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS CONSENT LETTER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The submission to jurisdiction, service of process, waiver of venue and waiver of jury trial provisions of Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.
[Signature pages follow]
2
IN WITNESS WHEREOF, each of the undersigned has caused this Consent Letter to be duly executed and delivered by a duly authorized officer as of the date first written above.
| BANK OF AMERICA, N.A., as a Lender | ||
| By: |
/s/ Sherman Wong | |
| Name: |
Sherman Wong | |
| Title: |
Director | |
NEWMARK GROUP, INC.
CONSENT LETTER
| CITIZENS BANK, N.A., a Lender | ||
| By: |
/s/ Connor Kellogg | |
| Name: |
Connor Kellogg | |
| Title: |
Vice President | |
NEWMARK GROUP, INC.
CONSENT LETTER
| FIFTH THIRD BANK, NATIONAL ASSOCIATION, a Lender | ||
| By: |
/s/ Taylor Beringer | |
| Name: |
Taylor Beringer | |
| Title: |
Senior Vice President | |
NEWMARK GROUP, INC.
CONSENT LETTER
| PNC BANK, NATIONAL ASSOCIATION, a Lender | ||
| By: |
/s/ Paul Gleason | |
| Name: |
Paul Gleason | |
| Title: |
Senior Vice President | |
NEWMARK GROUP, INC.
CONSENT LETTER
| REGIONS BANK, a Lender | ||
| By: |
/s/ Travis Lovell | |
| Name: |
Travis Lovell | |
| Title: |
Managing Director | |
NEWMARK GROUP, INC.
CONSENT LETTER
| U.S. BANK NATIONAL ASSOCIATION, a Lender | ||
| By: |
/s/ Kelsey Hehman | |
| Name: |
Kelsey Hehman | |
| Title: |
Vice President | |
NEWMARK GROUP, INC.
CONSENT LETTER
| WELLS FARGO BANK, NATIONAL ASSOCIATION, a Lender | ||
| By: | /s/ Nick Brokke | |
| Name: | Nick Brokke | |
| Title: | Director | |
NEWMARK GROUP, INC.
CONSENT LETTER
| ACCEPTED AND AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE: | ||
| NEWMARK GROUP, INC., a Delaware corporation | ||
| By: | /s/ Michael Rispoli | |
| Name: | Michael Rispoli | |
| Title: | Chief Financial Officer | |
NEWMARK GROUP, INC.
CONSENT LETTER
| ACCEPTED AND AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE: | ||
| BANK OF AMERICA, N.A., as the Administrative Agent | ||
| By: | /s/ Sherman Wong | |
| Name: | Sherman Wong | |
| Title: | Director | |
NEWMARK GROUP, INC.
CONSENT LETTER