anthra8k.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
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Date
of Report (Date of earliest event reported)
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February 2, 2010 (February 1,
2010)
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(Exact
name of registrant as specified in its charter)
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Maryland
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001-13937
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13-3978906
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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40
East 52nd Street, New York, New York
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10022
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(212)
810-3333
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(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 (see General Instruction A.2. below):
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.02
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Termination
of a Material Definitive Agreement.
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The information required by Item 1.02
contained in Item 2.04 is incorporated by reference into this Item
1.02.
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Item
2.04
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement.
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On February 1, 2010, in connection with
the continuing events of default under the Master Repurchase Agreement and Annex
I thereto, dated December 23, 2004, as supplemented by the English Loan
Supplement dated December 23, 2004, the Joinder, dated August 24, 2005, the
Joinder, dated October 24, 2005, and the Letter Agreement, dated July 8, 2008
and as amended on February 8, 2007, July 8, 2008, July 17, 2008 and May 15, 2009
(as supplemented and amended, the "Repurchase Agreement"), among Anthracite
Capital, Inc. (the "Company"), Anthracite Funding, LLC, a wholly owned
subsidiary of the Company ("Anthracite Funding"), AHR Capital DB Limited, a
wholly owned subsidiary of the Company (together with Anthracite Funding, the
"Seller"), and Deutsche Bank AG, Cayman Islands Branch ("Deutsche Bank"), the
aggregate Repurchase Price (as defined in the Repurchase Agreement), originally
due on September 30, 2010 under the Repurchase Agreement, became immediately due
on February 1, 2010 (the "Demand Date"). The continuing events of
defaults included, without limitation, the breach by the Company of a covenant
that the Company’s operating earnings (as defined in the Guaranty (as defined
below)) will not be less than a specified amount for the quarter ending on
September 30, 2009, as previously disclosed in the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009.
The Seller's obligations under the
Repurchase Agreement were guaranteed by the Company under the Guaranty, dated
December 23, 2004, as amended on February 27, 2007, July 8, 2008 and May 15,
2009, by the Company for the benefit of Deutsche Bank (as amended, the
"Guaranty"). On February 1, 2010, approximately $63 million of
borrowings and restructuring fees were outstanding under the Repurchase
Agreement.
Pursuant to the terms of the Repurchase
Agreement and a consent entered into among Deutsche Bank, the Seller, the
Company and its affiliates, the Seller agreed to assign to Deutsche Bank, and
Deutsche Bank agreed to retain, on or before February 5, 2010, the Purchased
Assets (as defined in the Repurchase Agreement) in full satisfaction of all
amounts owing to Deutsche Bank under the Repurchase Agreement (the "Assignment")
if the Seller had not repurchased the Purchased Assets for the aggregate
Repurchase Price and all other amounts owing under the Repurchase Agreement on
or before the Demand Date. The Seller did not repurchase the
Purchased Assets and the Assignment has taken effect as of the Demand Date, as a
result of which (i) Deutsche Bank has assumed full ownership and control of
the Purchased Assets, (ii) any remaining legal or equitable interest or any
voting or servicing rights of the Seller or its affiliates with respect to the
Purchased Assets, along with any remaining right of the Seller to repurchase the
Purchased Assets, have been terminated, and (iii) the Repurchase Agreement and
the Guaranty have been terminated.
Deutsche Bank separately released any
second priority liens it held on the Company's and the Company's affiliates'
assets and any interests it had in the Cash Management Account (as defined in
the Repurchase Agreement), and Bank of America, N.A., Banc of America
Mortgage
Capital
Corporation, Morgan Stanley Mortgage Servicing Limited and Morgan Stanley
Principal Funding, Inc. released any second priority liens they held on the
Purchased Assets.
On February 1, 2010, the Company did
not make interest payments due on its outstanding (i) $62.5 million aggregate
principal amount of 0.75%-to-7.4975% Junior Subordinated Notes due 2035, issued
in May 2009, (ii) $31.25 million aggregate principal amount of 0.75%-to-7.4975%
Junior Subordinated Notes due 2035, issued in July 2009, (iii) $62.5 million
aggregate principal amount of 0.75%-to-7.73% Junior Subordinated Notes due 2036,
(iv) €37.5 million aggregate principal amount of 0.75%-to-Floating Rate Junior
Subordinated Notes due 2022, (v) €25.0 million aggregate principal amount
of 0.75%-to-Floating Rate Junior Subordinated Notes due 2022, (vi) $43.5
million aggregate principal amount of 1.25%-to-7.22% Senior Notes due 2016, and
(vii) $26.4 million aggregate principal amount of
1.25%-to-7.772%-to-Floating Rate Senior Notes due 2017 (together with the
1.25%-to-7.22% Senior Notes due 2016, the "Defaulted Senior
Notes"). Under the indentures governing each series of the above
mentioned notes, the Company has three days to cure the interest payment
defaults or events of default would occur. The Company does not
anticipate being able to cure the interest payment defaults within the three-day
period. Prior to February 1, 2010, events of default already existed
under the indentures governing each series of the Defaulted Senior Notes as a
result of the delisting of the Company's common stock from the New York Stock
Exchange, as previously disclosed in the Company's filings with the
SEC.
As previously disclosed in the
Company's filings with the SEC, the Company did not make the interest payments
due on December 30, 2009 on its outstanding $18.75 million aggregate principal
amount of 7.20% Senior Notes due 2016 (the "7.20% Notes"), which was subject to
a 30-day cure period before constituting an event of default. The
Company failed to make the interest payments due on the 7.20% Notes within this
30-day period. As a result, an event of default occurred and is
continuing under the indenture governing the 7.20% Notes.
While the event of default is
continuing, the trustee or the holders of at least 25% in aggregate principal
amount of the 7.20% Notes may, by a written notice to the Company, declare the
principal amount of the 7.20% Notes to be immediately due and
payable. To date, the Company has not received any such written
notice of acceleration.
The event of default under the 7.20%
Notes has also resulted in additional events of default under each of the
Company's secured facilities with Bank of America, BlackRock Holdco 2, Inc.
and Morgan Stanley (collectively, the "Secured Facilities") due to cross
defaults. Prior to January 30, 2010, events of default already
existed under each of the Company's Secured Facilities, as previously disclosed
in the Company's filings with the SEC. If any acceleration were to
occur under any of the Company's Secured Facilities or any of the Company's
other debt instruments in which events of defaults exist, the Company would not
have sufficient liquid assets available to repay such accelerated indebtedness
and the Company would be unable to continue to fund its operations or continue
its business.
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.
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ANTHRACITE
CAPITAL, INC.
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By:
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/s/ Richard M.
Shea
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Name:
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Richard
M. Shea
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Title:
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President
and Chief Operating Officer
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Dated:
February 2, 2010
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