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EX-99.1 - EX-99.1 - Farmland Partners Inc.a14-20136_1ex99d1.htm
EX-10.2 - EX-10.2 - Farmland Partners Inc.a14-20136_1ex10d2.htm
EX-10.1 - EX-10.1 - Farmland Partners Inc.a14-20136_1ex10d1.htm

 

 

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): August 22, 2014

 


 

FARMLAND PARTNERS INC.

(Exact name of registrant as specified in its charter)

 


 

Maryland

(State or other jurisdiction

of incorporation)

 

001-36405

(Commission

File Number)

 

46-3769850

(IRS Employer

Identification No.)

 

8670 Wolff Court, Suite 240

Westminster, Colorado

(Address of principal executive offices)

 

80031

(Zip Code)

 

Registrant’s telephone number, including area code: (720) 452-3100

 

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:

 

o                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                 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 August 22, 2014, Farmland Partners Inc. (the “Company”) and Farmland Partners Operating Partnership, LP, the operating partnership of the Company (the “Operating Partnership”), entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser (the “Purchaser”), regarding a secured note purchase facility (the “Farmer Mac Facility”) that provides for borrowings up to an aggregate principal amount of $30.0 million.

 

Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more notes to the Purchaser that will be secured by pools of mortgage loans, which will, in turn, be secured by first liens on agricultural real estate owned by the Company. The mortgage loans will have effective loan-to-value ratios of up to 60%, after giving effect to the overcollateralization obligations described below. Each note issued by the Operating Partnership is expected to have a three-year term and bear a fixed or floating interest rate to be determined at the time of each issuance based on then-current market rates. Prepayment of each note issuance will not be permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement.

 

The Operating Partnership’s ability to borrow under the Farmer Mac Facility is subject to the Company’s ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including: a maximum leverage ratio of not more than 60%; a minimum fixed charge coverage ratio of 1.50 to 1.00, beginning after the second quarter of 2015; and a minimum tangible net worth.

 

In connection with the Bond Purchase Agreement, on August 22, 2014, the Company and the Operating Partnership also entered into a pledge and security agreement (the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant to which the Company and the Operating Partnership agreed to pledge, as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding notes held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding notes held by the Purchaser. In addition, the Company agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement.

 

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.

 

The foregoing summaries of the Bond Purchaser Agreement and the Pledge Agreement are qualified in their entirety by reference to the Bond Purchaser Agreement and the Pledge Agreement, copies of which are attached as Exhibits 10.1 and 10.2 hereto and are 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.

 

On August 27, 2014, the Operating Partnership issued a $20.7 million, interest-only note (the “Note”) to the Purchaser under the Farmer Mac Facility. The Note has a three-year term and has a fixed interest rate of 2.40%. The Company expects settlement of the Note issuance to occur on September 3, 2014.

 

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.

 

The Company issued a press release on August 27, 2014 announcing that it had entered into the Farmer Mac Facility and issued the Note described above. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

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Item 9.01.                                        Financial Statements and Exhibits.

 

(d)         Exhibits.

 

The following exhibits are furnished or filed, as applicable, with this Current Report on Form 8-K:

 

Exhibit
No.

 

Description

 

 

 

10.1

 

Bond Purchase Agreement, dated as of August 22, 2014, by and among Farmland Partners Inc., Farmland Partners Operating Partnership, LP, Farmer Mac Mortgage Securities Corporation and Federal Agricultural Mortgage Corporation.

10.2

 

Pledge and Security Agreement, dated as of August 22, 2014, by and among Farmland Partners Inc., Farmland Partners Operating Partnership, LP, Farmer Mac Mortgage Securities Corporation and Federal Agricultural Mortgage Corporation.

99.1*

 

Press Release, dated August 27, 2014.

 


*  Furnished herewith.

 

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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.

 

 

FARMLAND PARTNERS INC.

 

 

Dated: August 28, 2014

 

By:

/s/ Luca Fabbri

 

 

Luca Fabbri

 

 

Chief Financial Officer, Secretary and Treasurer

 

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EXHIBIT INDEX

 

Exhibit
No.

 

Description

 

 

 

10.1

 

Bond Purchase Agreement, dated as of August 22, 2014, by and among Farmland Partners Inc., Farmland Partners Operating Partnership, LP, Farmer Mac Mortgage Securities Corporation and Federal Agricultural Mortgage Corporation.

10.2

 

Pledge and Security Agreement, dated as of August 22, 2014, by and among Farmland Partners Inc., Farmland Partners Operating Partnership, LP, Farmer Mac Mortgage Securities Corporation and Federal Agricultural Mortgage Corporation.

99.1*

 

Press Release, dated August 27, 2014.

 


*  Furnished herewith.

 

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