Office Properties Income Trust (Nasdaq: OPI) “(“OPI”) today
announced that it is offering noteholders the option to exchange
their outstanding senior unsecured notes due 2025, 2026, 2027 and
2031 for new 9.000% Senior Secured Notes due 2029 and related
guarantees pursuant to the terms and conditions set forth in an
Offering Memorandum dated as of May 1, 2024 (the “Offering
Memorandum”).
Exchange Offers
OPI is offering to exchange (the “Exchange Offers”) its
outstanding 4.50% Senior Unsecured Notes due 2025 (the “Existing
2025 Notes”), 2.650% Senior Unsecured Notes due 2026 (the “Existing
2026 Notes”), 2.400% Senior Unsecured Notes due 2027 (the “Existing
2027 Notes”) and 3.450% Senior Unsecured Notes due 2031 (the
“Existing 2031 Notes” and, together with the Existing 2025 Notes,
the Existing 2026 Notes, and the Existing 2027 Notes, the “Existing
Notes”) for up to $610 million in aggregate principal amount of
Senior Secured Notes due 2029 (the “New Notes”) and related
guarantees. The New Notes will be secured by first-priority liens
on 19 properties with an Adjusted Total Assets value (as defined in
OPI’s debt agreements) of approximately $722 million and
second-priority liens on 19 additional properties that secure OPI’s
credit facility with an Adjusted Total Assets value of
approximately $1.0 billion.
Each $1,000 of Existing Notes that is validly tendered and not
validly withdrawn at or prior to 5:00 p.m., New York City time, on
May 14, 2024 (such date and time, as it may be extended, the “Early
Delivery Time”) or that is validly tendered after the Early
Delivery Time but at or prior to 5:00 p.m., New York City time, on
May 30, 2024, unless it is extended or earlier terminated by OPI
(such date and time, as it may be extended, the “Expiration Time”)
and that is accepted by OPI, will be entitled to receive the
consideration shown in the table below under the columns beginning
with “Early Exchange Consideration” and “Late Exchange
Consideration,” respectively. The Exchange Notes will be exchanged
in accordance with the assigned Acceptance Priority Levels
described in the table below, with 1 being the highest and 4 being
the lowest, subject to proration and rounding.
Principal Amount of New
Secured Notes
Existing Notes to Be
Exchanged
CUSIP/ISIN
Aggregate Outstanding
Principal Amount
Acceptance Priority
Level
Early Exchange Consideration,
if Tendered and Not Validly Withdrawn at or prior to the Early
Delivery Time
Late Exchange Consideration,
if Tendered after the Early Delivery Time and at or prior to the
Expiration Time
Existing 2025 Notes
81618TAC4/US81618TAC45
$650,000,000
1
$938
$918
Existing 2031 Notes
67623CAF6/US67623CAF68
$400,000,000
2
$515
$495
Existing 2027 Notes
67623CAE9/US67623CAE93
$350,000,000
3
$610
$590
Existing 2026 Notes
67623CAD1/US67623CAD11
$300,000,000
4
$720
$700
In addition, holders of Exchange Notes will be entitled to
accrued but unpaid interest with respect to such series to but
excluding the date on which they are exchanged for New Notes (such
date, the “Settlement Date”). The Settlement Date for the Exchange
Offers is expected to be on or about the second business day
following the Expiration Date.
An Eligible Holder (as defined below) must tender all of its
Existing 2025 Notes in the Exchange Offers in order to participate
in the Exchange Offers. An Eligible Holder may withdraw Existing
2025 Notes from an Exchange Offer only if it validly withdraws all
its Existing 2025 Notes from such Exchange Offer and also validly
withdraws its tender of all other Existing Notes from the
applicable Exchange Offers.
Conditions to Exchange Offers
The consummation of each Exchange Offer is subject to certain
conditions. Among other conditions, the Exchange Offers are
conditional upon the satisfaction or, if applicable, waiver of, (i)
the valid tender of at least $97.5 million in aggregate principal
amount of the Existing 2025 Notes and (ii) the valid tender of a
sufficient amount of Existing Notes such that at least $488 million
in aggregate principal amount of New Notes will be issued on the
Settlement Date.
Expiration Time and Withdrawal Deadline
Each Exchange Offer will expire at the Expiration Time. Existing
Notes that are tendered may not be withdrawn after 5:00 p.m., New
York City time, on the date of the Early Delivery Time (such date
and time with respect to an Exchange Offer, as the same may be
extended, the “Withdrawal Deadline”), except in limited
circumstances as set forth in the Offering Memorandum. Holders of
Existing Notes that validly tender Existing Notes at or prior to
the Early Delivery Time may validly withdraw their tender of such
Existing Notes at any time at or prior to the Withdrawal Deadline,
but they will not be entitled to receive the Early Exchange
Consideration set forth in the table above unless they validly
re-tender at or prior to the Early Delivery Time.
No Registration
The offer and sale of the New Notes and related guarantees will
not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws, and the New Notes
and related guarantees will therefore be subject to restrictions on
transferability and resale. OPI does not intend to register the
sale of any of the New Notes and related guarantees under the
Securities Act or the securities laws of any other jurisdiction and
is not providing registration rights. The New Notes and related
guarantees may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements and may not be transferred by any holder except in
accordance with the restrictions described under “Transfer
Restrictions” in the Offering Memorandum.
Eligible Holders
The Exchange Offers are being made, and the New Notes and
related guarantees are being offered and issued, only to holders
who have certified to OPI that either they are (a) in the U.S. and
are “qualified institutional buyers” (as defined in Rule 144A under
the Securities Act) and are holders of the Existing Notes, or (b)
outside the U.S. and are holders of the Existing Notes who are
non-U.S. persons in reliance upon and in compliance with Regulation
S under the Securities Act (such holders, “Eligible Holders”). Only
Eligible Holders are authorized to receive or review the Offering
Memorandum or to participate in the Exchange Offers.
The Offering Memorandum is only available to holders who
complete an eligibility letter confirming their status as Eligible
Holders. Holders of Existing Notes who wish to receive a copy of
the eligibility letters for the Exchange Offers may contact the
information and exchange agent, D.F. King & Co (the
“Information and Exchange Agent”), at D.F. King & Co., Inc., 48
Wall Street, New York, New York 10005, Attn: Michael Horthman,
(212) 269-5550 (for banks and brokers) or (800) 829-6551 (for all
others). Holders may also obtain and complete an electronic copy of
the applicable eligibility letter on the following website links
maintained by the Information and Exchange Agent:
www.dfking.com/opi.
Requests for the Exchange Offer materials from Eligible Holders
may be directed to the Information and Exchange Agent at D.F. King
& Co., Inc., 48 Wall Street, New York, New York 10005, Attn:
Michael Horthman, (212) 269-5550 (for banks and brokers) or (800)
829-6551 (for all others).
General
OPI is making the Exchange Offers only by, and pursuant to, the
terms of the Offering Memorandum. OPI reserves the right to
terminate, withdraw, amend or extend one or more of the Exchange
Offers in its discretion, subject to the terms and conditions set
forth in the Offering Memorandum.
None of OPI, Moelis & Company LLC, as dealer manager, the
Information and Exchange Agent, their respective affiliates nor any
other person makes any recommendation as to whether Eligible
Holders should tender or refrain from tendering their Existing
Notes in the Exchange Offers, as applicable. Eligible Holders must
make their own decision as to whether or not to tender their
Existing Notes, as applicable, as well as with respect to the
principal amount of the Existing Notes to tender.
The Exchange Offers are not being made to any holders of
Existing Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. The Existing Notes
that are not exchanged will continue to be outstanding in
accordance with all other terms of the Existing Notes and the
indentures governing such Existing Notes.
This press release is being made for informational purposes only
in accordance with Rule 135c of the Securities Act and does not
constitute an offer to purchase securities or a solicitation of an
offer to sell any securities or an offer to sell or the
solicitation of an offer to purchase any new securities, nor does
it constitute an offer or solicitation in any jurisdiction in which
such offer or solicitation is unlawful. The Exchange Offers are
being made solely on the terms and subject to the conditions set
forth in the Offering Memorandum and the information in this press
release is qualified by reference to such Offering Memorandum.
Non-GAAP Financial Measures
OPI presents certain “non-GAAP financial measures” within the
meaning of the applicable rules of the Securities and Exchange
Commission, including Adjusted Total Assets. These measures do not
represent cash generated by operating activities or OPI’s balance
sheet assets in accordance with U.S. generally accepted accounting
principles (“GAAP”) and should not be considered alternatives to
net income (loss), total assets or as indicators of OPI’s operating
performance or as measures of OPI’s liquidity. These measures
should be considered in conjunction with net income (loss) and
total assets as presented in OPI's condensed consolidated
statements of income (loss) and condensed consolidated balance
sheets, respectively. OPI considers these non-GAAP measures to be
appropriate supplemental measures of operating performance for a
real estate investment trust, along with net income (loss) and
total assets. OPI believes these measures provide useful
information to investors because by excluding the effects of
certain historical amounts, such as depreciation, they may
facilitate a comparison of OPI’s operating performance between
periods and with other REITs and may help both investors and
management to understand the operations of OPI's properties. Please
see below for a reconciliation of those amounts to amounts
determined in accordance with GAAP.
About Office Properties Income Trust
OPI is a national REIT focused on owning and leasing office
properties to high credit quality tenants in markets throughout the
United States. As of March 31, 2024, approximately 62% of OPI's
revenues were from investment grade rated tenants. OPI owned 151
properties as of March 31, 2024, with approximately 20.3 million
square feet located in 30 states and Washington, D.C. In 2024, OPI
was named as an Energy Star® Partner of the Year for the seventh
consecutive year. OPI is managed by The RMR Group (Nasdaq: RMR), a
leading U.S. alternative asset management company with over $41
billion in assets under management as of March 31, 2024, and more
than 35 years of institutional experience in buying, selling,
financing and operating commercial real estate. OPI is
headquartered in Newton, MA.
Reconciliation of non-GAAP measures
(amounts in thousands)
Reconciliation of Total Assets to
Adjusted Total Assets:
1st Lien Collateral
Properties(1)
2nd Lien Collateral
Properties(1)
Total assets
$
525,771
$
792,028
Plus: accumulated depreciation
53,854
121,951
Plus: adjustments to reflect original cost
of real estate assets
182,184
227,455
Less: accounts receivable and
intangibles
(40,195
)
(124,393
)
Adjusted Total Assets
$
721,614
$
1,017,041
(1) Amounts as of March 31, 2024.
WARNING CONCERNING
FORWARD-LOOKING STATEMENTS
Statements in this news release, including statements regarding
the Exchange Offers constitute “forward-looking statements” that do
not directly or exclusively relate to historical facts. When used
in this release, the words “may,” “will,” “might,” “should,”
“expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,”
“predict,” “intend,” “potential,” “outlook,” and “continue,” and
the negative of these terms, and other similar expressions are
intended to identify forward-looking statements and
information.
The forward-looking statements reflect OPI’s intentions, plans,
expectations, anticipations, projections, estimations, predictions,
assumptions and beliefs about future events and are subject to
risks, uncertainties and other factors, many of which are outside
of OPI’s control. Important factors that could cause actual results
to differ materially from the expectations expressed or implied in
the forward-looking statements include known and unknown risks.
Known risks include, among others, market conditions and the risks
described in OPI’s annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to those
reports and risks and uncertainties related to our ability to
consummate the Exchange Offers.
Because actual results could differ materially from OPI’s
intentions, plans, expectations, anticipations, projections,
estimations, predictions, assumptions and beliefs about the future,
you are urged to view all forward-looking statements with caution.
OPI does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the Nasdaq. No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501432126/en/
Questions regarding the Exchange Offers may be directed to:
Kevin Barry, Senior Director, Investor Relations (617) 219-1410
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