UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): November 9, 2017
 
 
KKR Real Estate Finance Trust Inc.
(Exact Name of Registrant as Specified in its Charter)
 
 
Maryland
001-38082
47-2009094
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
9 West 57th Street, Suite 4200, New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
 
(212) 750-8300
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 
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))
 
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.

On November 10, 2017, KREF Lending IV LLC (the “Seller”), a wholly owned subsidiary of KKR Real Estate Finance Trust Inc. (the “Company”), entered into an omnibus amendment (the “Amendment”) to its Master Repurchase and Securities Contract Agreement, dated as of December 6, 2016, with Morgan Stanley Bank, N.A. (the “Morgan Stanley Repurchase Agreement”).

The Amendment increased the amount available under the facility from $500.0 million to $600.0 million and, subject to customary conditions, permits the Company to request that the facility be further increased to $750.0 million.  In addition, the Amendment extended the scheduled termination date of the Morgan Stanley Repurchase Agreement from December 6, 2019 to December 6, 2020.  Except as amended by the Amendment, the material terms of the Morgan Stanley Repurchase Agreement remain unchanged.

The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

Item 1.02
Termination of a Material Definitive Agreement.

On November 9, 2017, KREF Lending II LLC, a wholly owned subsidiary of the Company, voluntarily terminated its Uncommitted Master Repurchase Agreement, dated as of October 15, 2015, with JPMorgan Chase Bank, National Association (the “JPM Repurchase Agreement”), and KKR Real Estate Finance Holdings L.P., a wholly owned subsidiary of the Company, voluntarily terminated its guarantee under the Guarantee Agreement, dated as of October 15, 2015, in favor of JPMorgan Chase Bank, National Association. Both of these terminations were effective November 9, 2017. The JPM Repurchase Agreement provided for a maximum facility amount of $250.0 million and, since December 31, 2016, no outstanding amounts have existed under this facility.

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 above under Item 1.01 is incorporated by reference into this Item 2.03.

Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.
 
Exhibit
No.
  
Description
   
  
 
SIGNATURE
 
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.
 
 
KKR REAL ESTATE FINANCE TRUST INC.
     
 
By:
/s/ Patrick Mattson
   
Name:
Patrick Mattson
   
Title:
Chief Operating Officer and Secretary
 
Date: November 10, 2017
 
 
Exhibit 10.1

OMNIBUS AMENDMENT

THIS OMNIBUS AMENDMENT (this “ Amendment ”), dated as of November 10, 2017, by and between MORGAN STANLEY BANK, N.A. (“ Buyer ”), KREF LENDING IV LLC (“ Seller ”) and KKR REAL ESTATE FINANCE HOLDINGS L.P. (“ Guarantor ”) amends that certain Master Repurchase and Securities Contract Agreement, dated December 6, 2016, by and between Buyer and Seller (as the same has been or may be further amended, modified and/or restated from time to time, the “ Repurchase Agreement ”) and the other Transaction Documents as provided herein.

RECITALS

WHEREAS, the parties hereto desire to make certain amendments to the Repurchase Agreement and the other Transaction Documents as provided herein.

WHEREAS, pursuant to Section 9(a) of the Repurchase Agreement, Seller desires to extend the term of the Facility.

NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows:

1.               Amendment to the Repurchase Agreement .  (a)      The definition of “ Facility Amount ” in Section 2 of the Repurchase Agreement is hereby amended and restated in its entirety as follows:

“ Facility Amount ” shall mean $600,000,000 as such amount may be reduced in accordance with Section 9(c) of this Agreement or increased in accordance with Section 9(d) of this Agreement.

(b)             The definition of “ Scheduled Facility Termination Date ” in Section 2 of the Repurchase Agreement is hereby amended and restated in its entirety as follows:

“ Scheduled Facility Termination Date ” means December 6, 2020.

(c)             Section 9(a) is hereby deleted in its entirety.

(d)             A new Section 9(d) is hereby added to the Repurchase Agreement and shall read in its entirety as follows:
 
(d)            Upon no less than five (5) Business Days’ prior written notice from Seller to Buyer, Seller may request that the Facility Amount be increased to $750,000,000.00.  Such request shall be approved by Buyer upon satisfaction of the following conditions: (i) no Default, Event of Default or Margin Deficit shall exist on the date of Seller’s request  or on the effective date of the increase of the Facility Amount, (ii) all representations and warranties in this Agreement shall be true, correct, complete and accurate in all respects as of the effective date of the increase of the Facility Amount (except such representations which by their terms speak as of a specific date and subject to any exceptions disclosed to Buyer in an Exception Report prior to such date and approved by Buyer and subject to any exceptions disclosed to Buyer in writing for matters or events occurring subsequent to such date which are not prohibited and do not constitute a default under this Agreement), (iii) Buyer and Seller shall have duly executed and delivered an amendment to this Agreement reflecting such increase in the Facility Amount, which amendment shall be duly acknowledged by Guarantor, and (iv) on or before the effective date of the increase of the Facility Amount, Seller shall have paid to Buyer the Upfront Fee with respect to the increased Facility Amount (i.e. $150,000,000) in accordance with the terms and provisions of the Fee Letter and all other Transaction Costs payable to Buyer in connection with the negotiation of such amendment.

2.               Defined Terms .  Capitalized terms used but not defined herein shall have the meanings set forth in the Repurchase Agreement.

3.               Ratification and Authority .

(a)             Seller hereby represents and warrants that (i) Seller has the power and authority to enter into this Amendment and to perform its obligations under the Repurchase Agreement as amended hereby and the other Transaction Documents, (ii) Seller has by proper action duly authorized the execution and delivery of this Amendment and (iii) this Amendment has been duly executed and delivered by Seller and constitutes Seller’s legal, valid and binding obligations, enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(b)             Seller hereby (i) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Repurchase Agreement and each of the other Transaction Documents, (ii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms of the Repurchase Agreement as amended hereby and the other Transaction Documents, in each case, subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles and (iii) represents, warrants and covenants that it is not in default under the Repurchase Agreement or any of the other Transaction Documents beyond any applicable notice and cure periods, and there are no defenses, offsets or counterclaims against Seller’s obligations under the Repurchase Agreement or the other Transaction Documents.
 
2
(c)             Guarantor, by its signature below, hereby (i) unconditionally approves and consents to the execution by Seller of this Amendment and the modifications to the Transaction Documents effected thereby, (ii) unconditionally ratifies, confirms, renews, and reaffirms all of its obligations under the Guaranty, (iii) acknowledges and agrees that its obligations under the Guaranty remain in full force and effect, binding on and enforceable against it in accordance with its terms subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles and (iv) represents, warrants and covenants that it is not in default under the Guaranty beyond any applicable notice and cure periods, and there are no defenses, offsets or counterclaims against its obligations under the Guaranty.  Guarantor hereby represents and warrants that it has the power and authority to enter into this Amendment and has by proper action duly authorized the execution and delivery of this Amendment by Guarantor.

4.               Continuing Effect .  Except as expressly amended by this Amendment, the Repurchase Agreement, the Guaranty and the other Transaction Documents remain in full force and effect in accordance with their respective terms.

5.              References to Transaction Documents .  All references to the Repurchase Agreement and the Guaranty in any Transaction Document, or in any other document executed or delivered in connection therewith shall, from and after the execution and delivery of this Amendment, be deemed a reference to the Repurchase Agreement and the Guaranty as amended hereby, unless the context expressly requires otherwise.

6.               Governing Law .  This Amendment shall be governed by and construed and interpreted in accordance with the laws of the State of New York.

7.               Counterparts .  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of a manually executed original counterpart thereof.

 
[Signatures appear on the next page.]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered in their names as of the date first above written.
 
 
BUYER :
   
 
MORGAN STANLEY BANK, N.A. ,
 
a national banking association
     
 
By:
/s/ Anthony Preisano
   
Name: Anthony Preisano
   
Title:   Authorized Signatory

 
[Signatures continue on the next page]
 
 
SELLER:
 
     
 
KREF LENDING IV LLC , a Delaware limited liability company
 
       
 
By:
/s/ Patrick Mattson
 
   
Name:  Patrick Mattson
 
   
Title:  Authorized Signatory
 
 
 
 
GUARANTOR:
 
     
 
KKR REAL ESTATE FINANCE HOLDINGS L.P. , a
 
  Delaware limited partnership  
         
 
By:
KKR REAL ESTATE FINANCE TRUST INC. ,
 
    its general partner  
         
   
By:
/s/ Patrick Mattson
 
     
Name:  Patrick Mattson
 
     
Title:  Authorized Signatory