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): June 14, 2017

 

 

NEXPOINT RESIDENTIAL TRUST, INC.

(Exact Name Of Registrant As Specified In Charter)

 

 

 

Maryland

(State or Other Jurisdiction

of Incorporation)

 

001-36663

(Commission

File Number)

 

47-1881359

(IRS Employer

Identification No.)

300 Crescent Court, Suite 700

Dallas, Texas 75201

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 628-4100

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 ( see General Instruction A.2. below):

 

☐ 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 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 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On June 14, 2017, NexPoint Residential Trust, Inc. (the “Company”), through its operating partnership, NexPoint Residential Trust Operating Partnership, L.P., entered into an interest rate swap transaction with KeyBank National Association (the “Swap”). The Company entered into the Swap to fix a portion of, and mitigate the risk associated with, the Company’s floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness). The Swap has an effective date of July 1, 2017 and a termination date of July 1, 2022. Beginning on August 1, 2017, the Company will be required to make monthly fixed rate payments of 1.78200% calculated on a notional amount of $100 million, while the counterparty will be obligated to make monthly floating rate payments based on LIBOR to the Company referencing the same notional amount. A copy of the Swap confirmation is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

The Company has now hedged $650 million, or 99.2% of its floating rate debt, effectively fixing 30-day LIBOR at a weighted averaged fixed rate of 1.3388% through July 2021.

Item 5.07. Submission of Matters to a Vote of Security Holders.

On June 15, 2017, the Company held its Annual Meeting of Stockholders. All matters submitted for approval by the Company’s stockholders, as described in the Company’s proxy statement on Schedule 14A filed with the Securities and Exchange Commission on April 24, 2017, were approved. The number of shares of common stock entitled to vote at the Company’s 2017 Annual Meeting of Stockholders was 21,043,669, representing the number of shares outstanding as of April 21, 2017, the record date for the annual meeting.

The results of each matter voted on were as follows:

1. Election of directors . The following directors were elected for terms expiring at the 2018 annual meeting of stockholders:

 

     Votes For      Votes
Withheld 		     Broker
Non-Votes 		 

James Dondero

     11,497,171        367,285        6,272,086  

Brian Mitts

     10,627,632        1,236,824        6,272,086  

Edward Constantino

     11,624,475        239,981        6,272,086  

Scott Kavanaugh

     8,726,617        3,137,839        6,272,086  

Arthur Laffer

     11,585,797        278,659        6,272,086  

2. Ratification of appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017 . The appointment was ratified.

 

Votes For

  

Votes Against

  

Abstentions

17,936,001

   79,764    120,777

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number

  

Exhibit Description

10.1    Confirmation of swap transaction, dated June 14, 2017, from KeyBank National Association to NexPoint Residential Trust Operating Partnership, L.P.

SIGNATURES

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.

 

NEXPOINT RESIDENTIAL TRUST, INC.
By:   /s/ Brian Mitts
  Name: Brian Mitts
  Title: Chief Financial Officer, Executive VP-Finance and Treasurer

Date: June 15, 2017

EXHIBIT INDEX

 

Exhibit Number

  

Exhibit Description

10.1    Confirmation of swap transaction, dated June 14, 2017, from KeyBank National Association to NexPoint Residential Trust Operating Partnership, L.P.

Exhibit 10.1

 

LOGO

KEYBANK NATIONAL ASSOCIATION

CONFIRMATION

 

Date:

14-Jun-2017

 

To:

NexPoint Residential Trust Operating Partnership, L.P. (“Counterparty”)

 

Attn:

Kris Barber, Matt McGraner

 

Email/Facsimile Number:

MSTHedgingDEN@chathamfinancial.com; MMcGraner@HighlandCapital.com

 

From:

KeyBank National Association (“KeyBank”)

 

Re:

Interest Rate Swap Transaction (“Transaction”)
  (Deal # / Tran # )

USI:

Ladies and Gentlemen:

The purpose of this letter agreement is to set forth the terms and conditions of the Transaction entered into between us on the Trade Date specified below. This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 2006 ISDA Definitions (the “Definitions”) as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), and amended from time to time, are incorporated into this Confirmation.    In the event of any inconsistency between this Confirmation and the Definitions, this Confirmation will govern.

This Confirmation supplements, forms part of and is subject to, the ISDA Master Agreement dated as of May 09,

2016, as amended and supplemented from time to time (the “Agreement”), between you and us. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below.

Each party represents to the other party that:

 

(a) Non-Reliance . It is acting for its own account, and it has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions of a Transaction will not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of this Transaction.

 

 

 

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(b) Assessment and Understanding . It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes, the risks of this Transaction.

 

(c) Status of Parties . The other party is not acting as a fiduciary for or an adviser to it in respect of this Transaction .

The terms of the Transaction to which this Confirmation relates are as follows:

1. General Terms:

 

Notional Amount:

$100,000,000.00 USD

 

Trade Date:

14-Jun-17

 

Effective Date:

01-Jul-17

 

Termination Date:

01-Jul-22

 

Business Days:

New York

Fixed Amounts Details:

Fixed Rate Payer:

Counterparty

Fixed Rate Payer Payment Dates:

Monthly, on the 1st, commencing on 01-Aug-17 up to and including the Termination date, subject to adjustment in accordance with Modified Following Business Day Convention

 

Period End Dates:

Monthly on the 1st commencing 01-Aug-17 subject to No Adjustment

 

Fixed Rate:

1.78200 %

 

Fixed Rate Day Count Fraction:

Act/360

Floating Amount Details:

Floating Rate Payer:

KeyBank

Floating Rate Payer Payment Dates:

Monthly, on the 1st, commencing on 01-Aug-17 up to and including the Termination date, subject to adjustment in accordance with Modified Following Business Day Convention

 

Period End Dates:

Monthly on the 1st commencing 01-Aug-17 subject to No Adjustment

 

Floating Rate for Initial Calculation Period including Spread:

To be determined

 

 

 

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Floating Rate Option:

USD-LIBOR-BBA, however the reference to “two London Banking Days” in the third line of the definition of “USD-LIBOR-BBA” as published in Section 7.1.(ab)(xxii) of the 2006 ISDA Definitions is replaced with “ one London Banking Day”.

 

Designated Maturity:

1-Month

 

Spread:

None

 

Floating Rate Day Count Fraction:

Act/360

 

Reset Dates:

The first day of each Floating Rate Payer Calculation Period, subject to No Adjustment

 

2. Calculation Agent:

As per the Agreement, or if not specified therein, KeyBank

3. Account Details

 

Payment Method:

FEDWIRE

 

Please pay us at:

KEYBANK NATIONAL ASSOCIATION

ABA #

A/C #

ATTN: DERIVATIVE OPERATIONS

 

We will pay you at:

NEXBANK SSB DALLAS TX

ABA #

FOR THE ACCOUNT OF NEXPOINT RESIDENTIAL TRUST, INC

A/C #

4. Other Provisions:

5. Other Conditions:

6. Counterparty Portal Access:

KeyBank will provide access to view the daily mid-market marks of your outstanding Transactions through a secured website, Key Derivatives On-line (“KDO”). Unless you notify KeyBank in writing that you do not agree to receive the daily mid-market marks via KDO, you agree that KDO is an acceptable and reliable manner of disclosure.

The following individuals will receive logon information and access to KDO once this Confirmation has been executed by an authorized signer(s) and returned to KeyBank. Please provide additional names and contact information in writing as required.

 

Name   Email Address
     
     
     
     
     

 

 

 

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Please confirm the foregoing correctly sets forth the terms of our agreement by responding within two (2) Business Days by returning an executed copy of this Confirmation to the attention of Derivative Operations at Derivatives_Documents@KeyBank.com or facsimile at (216) 370-6210. Failure to respond within such period shall not affect the validity or enforceability of this Transaction, and shall be deemed to be an affirmation of the terms and conditions contained herein, absent manifest error.

 

Regards,
KeyBank National Association
/s/ Mary Chudzinski
Name: Mary Chudzinski
Title:   Authorized Signatory

 

Accepted and Confirmed as

of the Trade Date

NexPoint Residential Trust Operating Partnership, L.P.
/s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

 

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