Item 1.01. |
Entry into a Material Definitive Agreement. |
The information required by this Item 1.01 is set forth under Item 8.01 below and is hereby incorporated by reference in response to this Item.
Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information required by this Item 2.03 is set forth under Item 8.01 below and is hereby incorporated by reference in response to this Item.
On January 12, 2024, Newmark Group, Inc. (the “Registrant,” “Newmark,” or the “Company”) closed an offering of $600.0 million aggregate principal amount of its 7.500% senior notes due 2029 (the “7.500% Notes”). The 7.500% Notes are general senior unsecured obligations of the Company. The initial purchasers in the offering were BofA Securities, Inc., Cantor Fitzgerald & Co., Wells Fargo Securities, LLC, PNC Capital Markets LLC, Regions Securities LLC, Goldman Sachs & Co. LLC, Citizens JMP Securities, LLC, Fifth Third Securities, Inc., U.S. Bancorp Investments, Inc., BMO Capital Markets Corp., Capital One Securities, Inc., Keefe, Bruyette & Woods, Inc., Piper Sandler & Co., Raymond James & Associates, Inc., WR Securities, LLC, UMB Financial Services, Inc., Comerica Securities, Inc., ICBC Standard Bank Plc, KeyBanc Capital Markets Inc., CastleOak Securities, L.P., and Santander US Capital Markets LLC. Cantor Fitzgerald, L.P., the Company’s majority stockholder (“Cantor”) purchased $125.0 million aggregate principal amount of 7.500% Notes in the offering, which purchase was approved by the Audit Committee of the Board of Directors of the Company. The Company received net proceeds from the offering of the 7.500% Notes of approximately $594.7 million after deducting the initial purchasers’ discounts and estimated offering expenses.
The 7.500% Notes were issued pursuant to an Indenture, dated as of November 6, 2018 (the “Base Indenture”), as supplemented by the Second Supplemental Indenture, dated as of January 12, 2024 (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and Regions Bank, as trustee (the “Trustee”). The 7.500% Notes bear interest at a rate of 7.500% per year, payable in cash on January 12 and July 12 of each year, commencing July 12, 2024. The 7.500% Notes will mature on January 12, 2029. The Company intends to use the net proceeds to repay all or a portion of the $420.0 million outstanding under its Delayed Draw Term Loan Credit Agreement, dated as of August 10, 2023, by and among the Company, as borrower, the several financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent. Any additional net proceeds will be used to repay outstanding revolving debt, including with respect to borrowings under the Credit Agreement, dated as of November 30, 2018 and amended December 20, 2023, between Newmark and Cantor, and for general corporate purposes.
The Company may redeem some or all of the 7.500% Notes at any time or from time to time for cash (i) prior to December 12, 2028 at certain “make-whole” redemption prices (as set forth in the Indenture) and (ii) on or after December 12, 2028, at 100% of the principal amount of such notes. If a “Change of Control Triggering Event” (as defined in the Indenture) occurs, holders may require the Company to purchase all or a portion of their 7.500% Notes for cash at a price equal to 101% of the principal amount of the 7.500% Notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date.
The Indenture contains customary covenants, such as reporting of annual and quarterly financial results, and restrictions on certain mergers and consolidations. The 7.500% Notes and the Indenture do not contain any financial covenants.
The 7.500% Notes and the Indenture contain customary events of default, including failure to pay principal or interest, breach of covenants, cross-acceleration to other debt in excess of $100.0 million and bankruptcy events, all subject to terms, including notice and cure periods, as set forth in the Indenture.