UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
5.50% Senior Notes due 2028
On December 21, 2021, Ready Capital Corporation (the “Company”) completed the public offer and sale of $110.0 million aggregate principal amount of the Company’s 5.50% Senior Notes due 2028 (the “Notes”). The net proceeds from the sale of the Notes are approximately $107.35 million, after deducting underwriters’ discounts and commissions and estimated offering expenses. The Company will contribute the net proceeds from the sale of the Notes to Sutherland Partners, L.P. (the “Operating Partnership”), the Company’s operating partnership subsidiary, in exchange for the issuance by the Operating Partnership to the Company of a senior unsecured note with terms that are substantially equivalent to the terms of the Notes. The Operating Partnership intends to use the net proceeds to originate or acquire target assets consistent with the Company’s investment strategy and for general corporate purposes. Prior to these anticipated uses, the Operating Partnership may invest the net proceeds in interest-bearing, short-term investments, including money market accounts, in each case that are consistent with the Company’s intention to continue to qualify as a real estate investment trust. The issue price to investors was $1,000 per Note. The Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000.
Underwriting Agreement
On December 16, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”), by and among the Company, the Operating Partnership, Waterfall Asset Management, LLC and Piper Sandler & Co., as representative of the several underwriters (collectively, the “Underwriters”). The Underwriting Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions whereby the Company and the Operating Partnership, on the one hand, and the Underwriters, on the other hand, have agreed to indemnify each other against certain liabilities.
Indenture
General
The Company issued the Notes under a base indenture, dated August 9, 2017 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee, as amended and supplemented by the Third Supplemental Indenture thereto, dated as of February 26, 2019 (the “Third Supplemental Indenture”), and the Sixth Supplemental Indenture thereto, dated as of December 21, 2021 (the “Sixth Supplemental Indenture,” and together with the Third Supplemental Indenture and the Base Indenture, the “Indenture”), each between the Company and U.S. Bank National Association, as trustee.
Interest
The Notes bear interest at a rate of 5.50% per annum, payable semi-annually in arrears on June 30 and December 30 of each year, beginning on June 30, 2022. The Notes will mature on December 30, 2028, unless earlier repurchased or redeemed.
Optional Redemption
At any time prior to December 30, 2024, the Company may redeem for cash all or any portion of the Notes, at the Company’s option, at a redemption price equal to a Make-Whole Amount (as defined in the Sixth Supplemental Indenture) plus 50 basis points, plus accrued and unpaid interest to, but excluding, the redemption date.
On or after December 30, 2024, the Company may redeem for cash all or any portion of the Notes, at the Company’s option, at the redemption prices (expressed as percentages of principal amount) set forth in the table below plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date, if redeemed during the twelve-month period beginning on December 30 of the years indicated in the table below:
| Redemption Price | ||||
| 2024 | 102.7500 | % | ||
| 2025 | 101.3750 | % | ||
| 2026 | 100.6875 | % | ||
| 2027 and thereafter | 100.0000 | % | ||
If the Company undergoes a change of control repurchase event, holders may require the Company to purchase the Notes, in whole or in part, for cash at a repurchase price equal to 101% of the aggregate principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase, as described in greater detail in the Indenture.
No “sinking fund” will be provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically.
Ranking
The Notes are the Company’s senior unsecured obligations and will not be guaranteed by any of its subsidiaries, except to the extent described in the Indenture upon the occurrence of certain events. The Notes rank (i) equal in right of payment to any of the Company’s existing and future unsecured and unsubordinated indebtedness, (ii) effectively junior in right of payment to any of the Company and its subsidiaries existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, and (iii) structurally junior to all existing and future indebtedness, other liabilities (including trade payables) and (to the extent not held by the Company) preferred stock, if any, of the Company’s subsidiaries.
Events of Default
The occurrence of an Event of Default (as defined in the Indenture) may, subject to certain conditions set forth in the Indenture, lead to the outstanding principal, plus accrued and unpaid interest, if any, of the Notes being immediately due and payable.
Listing
The Company does not intend to apply for listing of the Notes on any securities exchange.
The foregoing description of the Underwriting Agreement, the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, the Indenture and the form of Note, copies of which are filed or incorporated as Exhibits 1.1, 4.1, 4.2, 4.3 and 4.4 to this Current Report on Form 8-K, 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.
The information set forth in Item 1.01 above with respect to the Notes and the Indenture is hereby incorporated by reference into this Item 2.03 insofar as it relates to the creation of a direct financial obligation.
Item 9.01. Financial Statements and Exhibits.
* Previously filed.
Signatures
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.
| READY CAPITAL CORPORATION | ||
| Date: December 21, 2021 | By: | /s/ Andrew Ahlborn |
| Name: | Andrew Ahlborn | |
| Title: | Chief Financial Officer | |