ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Modified Portfolio Revolving Loan Facility
On October 17, 2018, KBS Real Estate Investment Trust III, Inc. (the "Company"),
through indirect wholly owned subsidiaries, entered into a three-year loan
facility with U.S. Bank, N.A., as administrative agent (the "Agent"), for a
committed amount of up to $215.0 million (the "Portfolio Revolving Loan
Facility").
As previously disclosed, on January 23, 2020, the Company, through indirect
wholly owned subsidiaries (collectively, the "Borrower"), entered into a first
modification and additional advance agreement (the "Modified Portfolio Revolving
Loan Facility") with the Agent and the Lenders (defined below) to (i) increase
the committed amount by $110.0 million to $325.0 million, subject to certain
conditions in the loan agreement, (ii) add 201 17th Street as collateral for the
Modified Portfolio Revolving Loan Facility, and (iii) reset the loan term. On
November 2, 2021, in connection with the disposition of one of the real estate
properties securing the Modified Portfolio Revolving Loan Facility, the
committed amount was reduced to $249.2 million, of which $124.6 million is term
debt and $124.6 million is revolving debt. The lenders under the Modified
Portfolio Revolving Loan Facility are U.S. Bank, N.A., Regions Bank, Citizens
Bank, City National Bank and Associated Bank, N.A. (the "Lenders").
On February 28, 2023, the Borrower entered into a second modification with the
Agent and the Lenders to convert the benchmark interest rate from LIBOR to Term
SOFR. Effective March 1, 2023, the Modified Portfolio Revolving Loan Facility
bears interest at the one-month forward-looking term rate based on the Secured
Overnight Financing Rate ("Term SOFR") plus 160 basis points per annum, which
increased the margin from 150 basis points to include a SOFR adjustment of 10
basis points per annum. All other material terms of the Modified Portfolio
Revolving Loan Facility remain the same. In addition, on February 28, 2023, the
Borrower exercised its first extension option under the Modified Portfolio
Revolving Loan Facility and extended the maturity date of the Modified Portfolio
Revolving Loan Facility to March 1, 2024. The Modified Portfolio Revolving Loan
Facility is secured by 515 Congress, the McEwen Building, Gateway Tech Center
and 201 17th Street.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The information in this Report set forth under Item 1.01 regarding the Modified
Portfolio Revolving Loan Facility is incorporated herein by reference.
ITEM 8.01 OTHER EVENTS
On February 21, 2023, the Company approved recommending to its stockholders that
they reject a mini-tender offer made by CMG Income Fund II, LLC, CMG Liquidity
Fund, LLC, Blue River Capital, LLC and CMG Partners, LLC for up to 450,000
shares of the Company's common stock, which is approximately 0.30% of the
Company's outstanding shares. The Company's response to this mini-tender offer
is attached as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Ex. Description
99.1 KBS Real Estate Investment Trust III, Inc. Response to Mini-Tender Offer
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