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): | December 23, 2015 |
RAIT Financial Trust
__________________________________________
(Exact name of registrant as specified in its charter)
| Maryland | 1-14760 | 23-2919819 |
|
_____________________
(State or other jurisdiction |
_____________
(Commission |
______________
(I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
| 2929 Arch St., 17th Floor, Philadelphia, Pennsylvania | 19104 | |
|
_________________________________
(Address of principal executive offices) |
___________
(Zip Code) |
| Registrant’s telephone number, including area code: | (215) 243-9000 |
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))
Item 1.01 Entry into a Material Definitive Agreement.
On December 23, 2015, RAIT CRE Conduit II, LLC, as seller, RAIT Financial Trust (as guarantor under the UBS MRA (defined below)) and UBS Real Estates Securities Inc., as buyer, entered into Amendment No. 5 (the "UBS Amendment ") to the Master Repurchase Agreement dated as of January 24, 2014 (as previously amended, the "UBS MRA") among such parties. The UBS Amendment set the defined asset values of defined purchased assets on the terms and subject to the conditions set forth in the UBS Amendment.
The summary in this report of the document referenced in Item 9.01(d) below and filed as an exhibit hereto does not purport to be complete and is qualified in its entirety by reference to the full text of such document which is incorporated herein by reference. The exhibit hereto has been filed solely to provide information regarding its terms. Such exhibit may contain representations and warranties that the parties thereto made solely for the benefit of the other parties. In addition, such representations and warranties (i) may have been qualified by confidential disclosures made to the other party in connection with such document, (ii) may be subject to a materiality standard which may differ from what may be viewed as material by investors, (iii) were made only as of the date of such document or such other date as is specified therein and (iv) may have been included in such document for the purpose of allocating risk between or among the parties thereto rather than establishing matters as facts.
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 under Item 1.01 of this report is incorporated herein by reference.
Item 8.01 Other Events.
On December 23, 2015, RAIT issued a press release announcing the closing of a non-recourse, floating-rate commercial mortgage backed securities transaction. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The exhibits filed as part of this Current Report on Form 8-K are identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by reference.
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.
| RAIT Financial Trust | ||||
| December 23, 2015 | By: |
/s/ James J. Sebra
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| Name: James J. Sebra | ||||
| Title: Chief Financial Officer and Treasurer | ||||
Exhibit Index
Exhibit No.
Description
Amendment No. 5 dated as of December 23, 2015 among RAIT CRE Conduit II, LLC (“Seller,” as seller under the UBS MRA (defined below)), RAIT Financial Trust (“RAIT,” as guarantor under the UBS MRA) and UBS Real Estates Securities Inc. (“UBS,” as buyer under the Master Repurchase Agreement dated as of January 24, 2014 among Seller, RAIT and UBS (the “UBS MRA”).
Press Release
AMENDMENT NO. 5 TO MASTER REPURCHASE AGREEMENT
Amendment No. 5 to Master Repurchase Agreement, dated as of December 23, 2015 (this “ Amendment ”), among UBS Real Estate Securities Inc. (the “ Buyer ”), RAIT CRE Conduit II, LLC (the “ Seller ”) and RAIT Financial Trust (“ Guarantor ”).
RECITALS
The Buyer, Seller and Guarantor are parties to (a) that certain Master Repurchase Agreement, dated as of January 24, 2014 (as amended by Amendment No. 1, dated as of March 17, 2014, Amendment No. 2, dated as of March 27, 2014, Amendment No. 3, dated as of September 28, 2015, and Amendment No. 4, dated as of November 13, 2015, the “ Existing Repurchase Agreement ”; as further amended by this Amendment, the “ Repurchase Agreement ”) and (b) that certain Pricing Letter, dated as of January 24, 2014, (as amended, restated, supplemented or otherwise modified from time to time, the “ Pricing Letter ”). The Guarantor is a party to that certain Guaranty (as amended, restated, supplemented or otherwise modified from time to time, the “ Program Guaranty ”), dated as of January 24, 2014, made by Guarantor in favor of the Buyer. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement, Pricing Letter and the Program Guaranty, as applicable.
The Buyer, Seller and Guarantor have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement. As a condition precedent to amending the Existing Repurchase Agreement, Buyer has required Guarantor to ratify and affirm the Program Guaranty on the date hereof.
Accordingly, the Buyer, Seller and Guarantor hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Ineligible Assets . Notwithstanding anything to the contrary set forth in the Existing Repurchase Agreement, the Purchased Assets listed on Annex A hereto, other than the Purchased Assets listed as “Vista Shops” and “Shoppes of Perry” on Annex A hereto, shall be deemed to have an Asset Value of zero (0) at the end of the Temporary Increase Period, as defined in Amendment No. 4 to Master Repurchase Agreement, dated as of November 13, 2015; provided, however, that (i) the Purchased Asset listed as “Vista Shops” on Annex A hereto shall be deemed to have an Asset Value of zero (0) on January 29, 2016, and (ii) the Purchased Asset listed as “Shoppes of Perry” on Annex A hereto shall be deemed to have an Asset Value of zero (0) on February 29, 2016. For the avoidance of doubt, if such “Vista Shops” or “Shoppes of Perry” Purchased Asset is repurchased and refinanced into a new Mortgage Loan and such new asset becomes subject to a new Transaction, such new Purchased Asset shall not be subject to this Section 2.
SECTION 2. Conditions Precedent . This Amendment shall become effective as of the date hereof, subject to the satisfaction of the following conditions precedent:
2.1 Delivered Documents . On or prior to the date hereof, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by duly authorized officers of the Buyer, Seller and Guarantor; and
(b) such other documents as the Buyer or counsel to the Buyer may reasonably request.
SECTION 3. Ratification of Agreement . As amended by this Amendment, the Existing Repurchase Agreement is in all respects ratified and confirmed and the Existing Repurchase Agreement as so modified by this Amendment shall be read, taken, and construed as one and the same instrument.
SECTION 4. Representations and Warranties . Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 11 of the Repurchase Agreement.
SECTION 5. Limited Effect . Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 6. Severability . Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 7. Counterparts . This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any documents to be delivered pursuant to this Amendment and any notices hereunder may be transmitted between them by email and/or by facsimile. Delivery of an executed counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Amendment. The original documents shall be promptly delivered, if requested.
SECTION 8. Binding Effect . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 9. GOVERNING LAW . THIS AMENDMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AMENDMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AMENDMENT, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AMENDMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE EFFECTIVENESS, VALIDITY AND ENFORCEABILITY OF ELECTRONIC CONTRACTS, OTHER RECORDS, ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES USED IN CONNECTION WITH ANY ELECTRONIC TRANSACTION BETWEEN BUYER AND SELLER PARTY SHALL BE GOVERNED BY E-SIGN.
SECTION 10. Reaffirmation of Program Guaranty . The Guarantor hereby (i) agrees that the liability of Guarantor or rights of Buyer under the Program Guaranty shall not be affected as a result of this Amendment, (ii) ratifies and affirms all of the terms, covenants, conditions and obligations of the Program Guaranty and (iii) acknowledges and agrees that such Program Guaranty is and shall continue to be in full force and effect.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
| UBS REAL ESTATE SECURITIES INC., as Buyer |
| By: /s/ Jared Randall |
|
Name: Jared Randall
Title: Director |
| By: /s/ Siho Ham |
|
Name: Siho Ham
Title: Director |
| RAIT CRE CONDUIT II, LLC, as Seller |
| By: RAIT Partnership, L.P., its sole member and manager |
| By: RAIT General, Inc., its sole general partner |
| By: /s/ James Sebra |
|
Name: James Sebra
Title: Chief Financial Officer |
| RAIT FINANCIAL TRUST, as Guarantor |
| By: /s/ James Sebra |
|
Name: James Sebra
Title: Chief Financial Officer ANNEX A TO AMENDMENT |
LIST OF PURCHASED ASSETS
| Principal | Purchase | |||||||||||
| Purchased Asset | Balance | Price | City | State | ||||||||
|
460 Nixon Road
|
11,400,000 | 8,550,000 | Pittsburgh | PA | ||||||||
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Chandler Airport Center I
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11,750,000 | 8,812,500 | Chandler | AZ | ||||||||
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Jupiter Medical and Technology Park
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10,138,186 | 2,838,692 | Jupiter | FL | ||||||||
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Shoppes of Perry
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7,000,000 | 5,250,000 | Perry | GA | ||||||||
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Vista Shops
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8,950,523 | 6,712,893 | Frederick | MD | ||||||||
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Woodforest Shopping Center
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5,700,000 | 4,275,000 | Houston | TX | ||||||||
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RAIT Financial Trust Closes a $347.4 Million Non-Recourse, Floating-Rate CMBS Transaction
PHILADELPHIA, PA — December 23, 2015 — RAIT Financial Trust (NYSE: RAS) (“RAIT”) announced today the closing of its fifth non-recourse, floating-rate CMBS transaction collateralized by floating rate commercial real estate first lien mortgage loans and pari passu participation interests in such mortgage loans, all of which were originated by subsidiaries of RAIT. The transaction involved the sale by a RAIT subsidiary of investment grade notes totaling approximately $263.6 million with a weighted average cost of LIBOR plus 2.62%. RAIT affiliates retained certain investment grade notes and all of the below investment grade and un-rated subordinated interests totaling approximately $83.8 million. RAIT entered into the transaction to obtain non-recourse, matched-term financing for the loans and participation interests serving as collateral. Barclays Capital Inc. acted as sole structuring agent. Barclays Capital Inc., Citigroup Global Markets Inc. and UBS Securities LLC acted as co-lead and joint book-running managers.
The bonds were offered inside the United States to (1) qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and (2) to other institutional investors that are accredited investors within the meaning of rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. The bonds have not been registered under the Securities Act or applicable state or foreign securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the bonds.
About RAIT Financial Trust
RAIT Financial Trust is an internally-managed real estate investment trust that provides debt
financing options to owners of commercial real estate and invests directly into commercial real
estate properties located throughout the United States. In addition, RAIT is an asset and property
manager of real estate-related assets. For more information, please visit www.rait.com or call
Investor Relations at 215.243.9000.
RAIT Financial Trust Contact
Andres Viroslav
215-243-9000
aviroslav@rait.com