Office Properties Income Trust filed SEC Form 8-K: Entry into a Material Definitive Agreement, Other Events, Creation of a Direct Financial Obligation, Unregistered Sales of Equity Securities, Regulation FD Disclosure, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s Telephone Number, Including Area Code)
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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title Of each class | Trading Symbol(s) | Name Of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
In this Current Report on Form 8-K, the terms “we”, “us”, “our” and “the Company” refer to Office Properties Income Trust.
| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture for 9.000% Senior Secured Notes due 2029
On June 20, 2024, in connection with the previously announced Exchange Offers described in Item 8.01 below, the Company issued $567,429,000 aggregate principal amount of new 9.000% senior secured notes due 2029, or the New Notes, and related guarantees, pursuant to that certain Indenture, dated as of June 20, 2024 (which we refer to as the Indenture), among the Company, the initial subsidiary guarantors listed on the signature pages thereto (which we refer to as the Initial Subsidiary Guarantors and, together with any future subsidiary guarantors, the Subsidiary Guarantors), and U.S. Bank Trust Company, National Association, as trustee and collateral agent.
Interest and maturity. Unless previously redeemed, the New Notes will mature on September 30, 2029, and will bear interest at a rate of 9.000% per year, payable semi-annually in arrears on March 31 and September 30 of each year, commencing September 30, 2024.
Guarantees. The New Notes will be fully and unconditionally guaranteed on a joint, several and secured basis by the Subsidiary Guarantors.
Security. The New Notes are secured by certain assets of the Initial Subsidiary Guarantors, including a first-priority lien and security interest on 19 fee-owned real properties held by certain of the Initial Subsidiary Guarantors (which Initial Subsidiary Guarantors we refer to as the First Lien Guarantors), and a second-priority lien and security interest on 19 separate fee-owned real properties held by certain other Initial Subsidiary Guarantors. The New Notes are also secured by a first-priority lien and security interest on 100% of the equity interests in each of the First Lien Guarantors and a second-priority lien and security interest on the equity interests in certain other Initial Subsidiary Guarantors.
Optional redemption. Prior to June 3, 2026, we may redeem the New Notes at a make-whole amount described in the Indenture plus principal and accrued and unpaid interest on such New Notes. On or after June 3, 2026, we may redeem the New Notes, at the redemption prices set forth in the Indenture, plus principal and accrued and unpaid interest on such New Notes
Covenants. The Indenture contains covenants that, among other things: (i) limit our and our subsidiaries’ ability to incur additional debt; (ii) limit our and the Subsidiary Guarantors’ ability to incur liens securing debt on any of the collateral, other than certain permitted liens; (iii) limit our and the Subsidiary Guarantors’ ability to consolidate or merge, or convey, transfer or lease all or substantially all of our and our subsidiaries’ assets and (iv) limit our and the Subsidiary Guarantors’ ability to sell, lease, convey, transfer, invest or dispose of collateral. In addition, the Indenture contains a covenant that requires us and our subsidiaries to maintain at all times Total Unencumbered Assets (as defined in the Indenture) of not less than 150% of the aggregate principal amount of the Unsecured Debt (as defined in the Indenture) of our and our subsidiaries on a consolidated basis in accordance with generally accepted accounting principles.
Events of default. The Indenture sets forth certain events of default after which the New Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us and certain of our subsidiaries upon which the New Notes shall automatically become immediately due and payable.
The foregoing is a summary of the material terms of the Indenture and the New Notes and does not purport to be complete, and is subject to, and qualified in its entirety by reference to, each of the Indenture and the form of New Notes, copies of which are attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated by reference herein.
| 2 |
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information in Item 8.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The issuance of common shares of beneficial interest pursuant to the Support Agreement, dated as of June 10, 2024, which we refer to as the Support Agreement, was made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act.
| Item 7.01 | Regulation FD Disclosure. |
On June 20, 2024, we posted to our website an investor presentation, a copy of which is furnished hereunder as Exhibit 99.1 attached hereto and incorporated by reference herein.
| Item 8.01 | Other Events. |
Settlement of Exchange Offer Transactions
On May 1, 2024, we commenced a series of private exchange offers, or the Exchange Offers, to exchange our outstanding (i) 4.500% senior unsecured notes due 2025, (ii) 2.650% senior unsecured notes due 2026, (iii) 2.400% senior unsecured notes due 2027 and (iv) 3.450% senior unsecured notes due 2031 (such notes, collectively, are referred to as the Existing Notes) for up to an aggregate principal amount of $610,000,000 of New Notes and related guarantees pursuant to the terms and conditions set forth in an Offering Memorandum, dated as of May 1, 2024, as amended by our press releases dated May 20, 2024, May 23, 2024 and June 10, 2024, or the Offering Memorandum.
The Exchange Offers expired as of 5:00 p.m., New York City time, on June 17, 2024. On June 18, 2024, we issued a press releasing announcing the expiration and results of the Exchange Offers, a copy of which is attached hereto as Exhibit 99.2 and incorporated by reference into this Item 8.01. On June 20, 2024, we completed the settlement of the Exchange Offers. The Company received the following aggregate principal amounts of Existing Notes accepted for exchange, and delivered the following aggregate principal amounts of New Notes in exchange therefor:
| Existing Notes to be Exchanged | Aggregate Principal Amount of Existing Notes Accepted for Exchange | Aggregate Principal Amount of New Notes Delivered | ||||||
| Existing 2025 Notes | $ | 150,846,000 | $ | 141,411,000 | ||||
| Existing 2026 Notes | $ | 159,512,000 | $ | 114,803,000 | ||||
| Existing 2027 Notes | $ | 269,216,000 | $ | 164,162,000 | ||||
| Existing 2031 Notes | $ | 285,645,000 | $ | 147,053,000 | ||||
| Total | $ | 865,219,000 | $ | 567,429,000 | ||||
In addition, on June 21, 2024, the Company issued 1,429,179 of our common shares of beneficial interest, $.01 par value per share, to certain holders of our Existing Notes party to the Support Agreement.
The Exchange Offers have expired, and are no longer open to participation by eligible holders of the Existing Notes. The New Notes have not been registered under the Securities Act of 1933, as amended, or the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The New Notes were offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act and outside the United States in compliance with Regulation S under the Securities Act.
This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
| 3 |
Warning Concerning Forward-Looking Statements
This Current Report on Form 8-K contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by our forward-looking statements as a result of various factors. The information contained in our periodic reports filed with the Securities and Exchange Commission, or SEC, including under “Risk Factors,” or incorporated therein, also identifies important factors that could cause our actual results to differ materially from those stated in or implied by our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon any forward-looking statements.
Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
No Offer or Solicitation
Neither this Current Report on Form 8-K nor the press release attached hereto as Exhibit 99.2 constitutes an offer to sell, or a solicitation of an offer to buy, the New Notes and related guarantees, nor shall there be any sale of the New Notes and related guarantees in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number |
Description | |
| 4.1 | Indenture, dated as of June 20, 2024, among Office Properties Income Trust, the subsidiaries listed on the signature pages thereto as guarantors and U.S. Bank Trust Company, National Association, as trustee and collateral agent. | |
| 4.2 | Form of New Notes (included in Exhibit 4.1 hereto). | |
| 99.1 | Investor Presentation dated June 20, 2024. (Furnished herewith.) | |
| 99.2 | Press Release dated June 18, 2024. | |
| 104 | Cover Page Interactive Data File. (Embedded within the Inline XBRL document.) |
| 4 |
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.
| OFFICE PROPERTIES INCOME TRUST | ||
| By: | /s/ Brian E. Donley | |
| Name: | Brian E. Donley | |
| Title: | Chief Financial Officer and Treasurer | |
Dated: June 21, 2024