Item 1.01 Entry Into a Material Definitive Agreement
Mortgage Loan Sale
As previously reported, AG Mortgage Investment Trust, Inc. (the "Company")
entered into a Bid Terms Acknowledgment Letter (the "Letter Agreement") with an
unaffiliated third party, evidencing the third party's intent to purchase the
pool of mortgage loans specified therein. The Letter Agreement provided that the
purchase and sale of the loans were subject to the parties entering into a
Mortgage Loan Purchase and Sale Agreement.
On May 28, 2020, the Company, as obligor, entered into a Mortgage Loan Purchase
and Sale Agreement (the "MLPSA") with Wilmington Savings Fund Society, FSB, not
in its individual capacity but solely as trustee for BCAT 2020-23TT (the
"Seller") and UMB Bank, National Association, not in its individual capacity,
but solely as legal title trustee for LVS Title Trust XIII (the "Purchaser").
The MLPSA provided for the sale by the Seller to the Purchaser of mortgage loans
specified therein (the "Loans") having an approximate unpaid principal balance
of $465 million for net proceeds of approximately $383 million. The closing of
the purchase and sale of the Loans occurred on May 28, 2020.
The net proceeds from the sale of the Loans pursuant to the MLPSA, were used to
repay the Company's indebtedness and associated payables secured by the Loans in
the aggregate amount of approximately $383 million.
Third Forbearance Agreement
As previously reported, on April 27, 2020, the Company entered into a Second
Forbearance Agreement dated April 27, 2020 (the "Second Forbearance Agreement")
pursuant to which each participating counterparty thereto agreed to continue to
forbear from exercising any of its rights and remedies in respect of events of
default and any and all other defaults under the applicable repurchase agreement
with the Company until the earlier of (a) 4:30 p.m. Eastern Daylight Time on
June 1, 2020, or (b) the occurrence and continuance of a Triggering Event (as
defined). Upon expiration of the Second Forbearance Agreement on June 1, 2020,
the Company entered into a Third Forbearance Agreement with the participating
counterparties (the "Third Forbearance Agreement") which extended the
forbearance period from June 1, 2020 to the earlier of (i) 4:30 p.m. Eastern
Daylight Time on June 15, 2020, or (ii) the occurrence and continuance of a
Triggering Event (as defined). The other terms of the Second Forbearance
Agreement were substantively unchanged in the Third Forbearance Agreement.
The foregoing descriptions of the MLPSA and the Third Forbearance Agreement are
not complete and are qualified in their entireties by the text of each
agreement, which are attached as Exhibits 10.1 and 10.2, respectively, to this
Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
Press Release
On June 1, 2020, the Company issued a press release, a copy of which is
furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Exhibit 99.1 hereto is being furnished pursuant to Item 7.01, and the
information contained therein shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such filing.
Item 8.01. Other Events.
Litigation Settlement
As previously reported, the Company received written notices from Royal Bank of
Canada and one of its affiliates ("RBC") alleging that events of default had
occurred with respect to various financing agreements. The Company disputed
RBC's notices of events of default and filed a suit in federal district court in
New York seeking both to enjoin RBC from selling the Company's collateral
securing the financing as well as damages. On May 28, 2020, the Company entered
into a settlement agreement with RBC pursuant to which the Company agreed to
dismiss its suit with prejudice and the Company and RBC mutually released each
other from further claims pursuant to the financing agreement. As part of the
settlement, the Company paid RBC $5.0 million in cash and issued to RBC a
secured promissory note in the principal amount of $2.0 million (the "Note").
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The principal amount of the Note is due on July 27, 2020 and accrues interest on
the unpaid principal balance at 6.0% per annum. The Company's obligations under
the Note are secured by a lien on all of the assets of the Company granted
pursuant to a Security Agreement (the "RBC Security Agreement") dated May 28,
2020 between the Company and RBC. Pursuant to the RBC Security Agreement, the
Company's obligations with respect to the Note and the lien held by RBC for the
security of the performance of the Company's obligations under the Note, are
subordinate to the Company's obligations to the Participating Counterparties (as
defined in the Third Forbearance Agreement) and to the lien held by the
Collateral Agent (as defined) pursuant to an Intercreditor and Subordination
Agreement by and among the Company, RBC and the Collateral Agent (the "RBC
Intercreditor and Subordination Agreement").
AG REIT Management, LLC, the Company's external manager (the "Manager"),
simultaneously entered into a separate intercreditor and subordination agreement
with RBC (the "Manager Intercreditor and Subordination Agreement") subordinating
the payment of the Company's previously issued $20 million secured promissory
note payable to the Manager to the Note payable to RBC, with the effect that the
Company's obligations to the Participating Counterparties has first priority
with respect to the Company's assets, the Note payable to RBC is second in
priority and the note payable to the Manager is third in priority.
As part of the settlement arrangement between the Company and RBC, and to
reflect the terms described above, the Company issued to the Manager an Amended
and Restated Secured Promissory Note dated May 28, 2020 in the principal amount
of $20 million (the "Amended and Restated Manager Note"), and the Company and
the Manager entered into an Amended and Restated Security Agreement dated May
28, 2020 (the "Amended and Restated Manager Security Agreement").
The foregoing descriptions of the Note, the RBC Security Agreement, the RBC
Intercreditor and Subordination Agreement, the Amended and Restated Manager
Note, the Amended and Restated Manager Security Agreement and the Manager
Intercreditor and Subordination Agreement are not complete and are qualified in
their entireties by the text of each instrument, which are attached as Exhibits
99.2, 99.3, 99.4, 99.5, 99.6, and 99.7 to this Current Report on Form 8-K,
respectively.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
Mortgage Loan Purchase and Sale Agreement dated as of May 28, 2020
among UMB Bank, National Association, as legal title trustee for LVS
10.1 Title Trust XIII, as purchaser, Wilmington Savings Fund Society,
FSB, as trustee, BCAT 2020-23TT, as seller, and AG Mortgage
Investment Trust, Inc., as obligor
Third Forbearance Agreement dated June 1, 2020, by and among AG
10.2 Mortgage Investment Trust, Inc. and certain of its affiliates and
the Participating Counterparties listed on Schedule 1 thereto
99.1 Press Release, dated June 1, 2020
99.2 Secured Promissory Note, dated May 28, 2020 from AG Mortgage
Investment Trust, Inc. payable to Royal Bank of Canada
Subordinated Security Agreement, dated May 28, 2020 by and among
99.3 AG Mortgage Investment Trust, Inc. and certain of its affiliates and
Royal Bank of Canada
Intercreditor and Subordination Agreement, dated May 28, 2020 by
99.4 and among Wilmington Trust, National Association, as Collateral
Agent, Royal Bank of Canada, AG REIT Management, LLC and AG Mortgage
Investment Trust, Inc.
Amended and Restated Secured Promissory Note, dated May 28, 2020
99.5 from AG Mortgage Investment Trust, Inc. payable to AG REIT
Management, LLC
Amended and Restated Security Agreement, dated May 28, 2020 by and
99.6 among AG Mortgage Investment Trust, Inc. and certain of its
affiliates and AG REIT Management, LLC
Intercreditor and Subordination Agreement, dated May 28, 2020
99.7 among Royal Bank of Canada, AG REIT Management, LLC and AG Mortgage
Investment Trust, Inc.
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FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995 related to the sale of certain of the Company's
assets, the Company's outstanding indebtedness and investment portfolio, certain
additional financial metrics, and the Company's entry into certain agreements,
among others. Forward-looking statements are based on estimates, projections,
beliefs and assumptions of management of the Company at the time of such
statements and are not guarantees of future performance. Forward-looking
statements involve risks and uncertainties in predicting future results and
conditions. Actual results and outcomes could differ materially from those
projected in these forward-looking statements due to a variety of factors and
the impact of the COVID-19 pandemic on these factors, including, without
limitation, changes in interest rates, changes in default rates, changes in the
yield curve, changes in prepayment rates, the availability and terms of
financing, changes in the market value of our assets, general economic
conditions, conditions in the market for Agency RMBS, Non-Agency RMBS and CMBS
securities, Excess MSRs and loans, our ability to predict and control costs, our
ability to maintain our exemption from registration under the Investment Company
Act of 1940, as amended, conditions in the real estate market, legislative and
regulatory actions by the U.S. Department of the Treasury, the Federal Reserve
and other agencies and instrumentalities in response to the economic effects of
the COVID-19 pandemic, our negotiations with our repurchase financing
counterparties and AG REIT Management, LLC, our ability to negotiate, to the
extent necessary, further extensions of the forbearance period with the
participating counterparties and to enter into settlements with the
non-participating counterparties and the impact of the changes described in this
Current Report on our ability to accurately estimate our investment portfolio
and book value per share as of April 30, 2020. Additional information concerning
these and other risk factors are contained in the Company's filings with the
SEC, including its most recent Annual Report on Form 10-K and subsequent
filings. Copies are available free of charge on the SEC's website,
http://www.sec.gov/. The Company undertakes no duty to update any
forward-looking statements in this Current Report on Form 8-K to reflect any
change in its expectations or any change in events, conditions or circumstances
on which any such statement is based.
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