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): September 29, 2011
THE HOWARD HUGHES CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware
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001-34856
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36-4673192 |
| (State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer |
| of incorporation)
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Identification No.) |
One Galleria Tower
13355 Noel Road, Suite 950
Dallas, Texas 75240
(Address of principal executive offices)
Registrant’s telephone number, including area code: (214) 741-7744
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On September 29, 2011, Victoria Ward, Limited; Victoria Ward Center L.L.C.; Victoria Ward
Entertainment Center, L.L.C.; Ward Plaza-Warehouse, LLC; and Ward Gateway-Industrial-Village, LLC
(collectively, “Victoria Ward”) entered into a loan agreement (the “Loan
Agreement”) with Wells Fargo Bank, National Association, as contractual representative and
administrative agent, Wells Fargo Securities, L.L.C., as the sole lead arranger and sole bookrunner
and the other lending institutions party thereto (collectively, the “Lenders”). The
entities comprising Victoria Ward are all wholly-owned, indirect subsidiaries of The Howard Hughes
Corporation (the “Company”).
The Loan Agreement provides for a five-year credit facility with a maturity date of September
29, 2016 under which Victoria Ward may borrow up to $250.0 million. The initial proceeds under the
Loan Agreement will be used to pay closing costs and pay off approximately $209.5 million of debt
outstanding under: (1) the loan agreement dated as of November 10, 2004 by and among Victoria Ward
Center L.L.C., Victoria Ward Entertainment Center L.L.C. and Bank of America, N.A; (2) the loan
agreement dated as of September 29, 2006 by and between Ward Gateway-Industrial-Village, LLC and
Bank of America, N.A.; and (3) the loan agreement dated as of September 29, 2006 by and between
Ward Plaza-Warehouse, LLC and PB (USA) Realty Corporation, which expire between January 1, 2014 and
October 5, 2016. The remaining proceeds from the Loan Agreement will be used primarily for capital
expenditures and leasing costs. The Victoria Ward entities have pledged real property comprising
the development known as Ward Centers as collateral for the loan.
Borrowings under the Loan Agreement bear interest at one-month LIBOR plus 2.5% and payments
are interest only. On September 30, 2011, Victoria Ward also entered into an interest rate swap
agreement with Wells Fargo Bank, National Association to effectively set the interest rate with
respect to a notional amount of $143.0 million of the borrowings under the Loan Agreement at a
3.80% fixed rate. The interest rate swap has an effective date of
October 3, 2011 and a
maturity date of September 30, 2016. Notwithstanding the terms of the interest rate swap, Victoria
Ward is ultimately obligated for the interest and principal due and payable under the Loan Agreement.
The Loan Agreement contains a number of customary covenants, including compliance with various
financial ratios and tests, and certain covenants that restrict, among other things, Victoria
Ward’s ability to incur debt; incur liens; transfer properties; merge or consolidate with other
companies and make certain acquisitions.
The Loan Agreement also contains customary events of default certain of which are subject to
cure periods. The events of default include, among others things, nonpayment of principal,
interest or fees; breach of the representations or warranties in any material respect; breach of
the financial, affirmative or negative covenants; payment default on, or accelerations of, other
material indebtedness; bankruptcy or insolvency; material judgments entered against Victoria Ward;
certain changes in control of Victoria Ward; and the invalidity or unenforceability of the Loan
Agreement or other documents associated with the Loan Agreement.
The Loan Agreement further requires that the Company provide certain guaranties and
indemnities in favor of the Lenders, including a limited guaranty of certain recourse carve-out
items, a completion guaranty and a hazardous materials indemnity agreement.
The descriptions of the Loan Agreement are
qualified in their entirety by the terms of the Loan Agreement. A
copy of the Loan Agreement is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 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.
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