Business
Office Properties Income Trust Enters into Restructuring Support Agreement with Noteholders to Reduce Debt and Strengthen Balance Sheet
Initiates Voluntary Chapter 11 Process to Implement Terms of Agreement Receives Commitment for $125 Million in New Money Financing to Support Operations
About this update from The Rmr Group Inc.
[{"type":"text","content":"\nInitiates Voluntary Chapter 11 Process to Implement Terms of Agreement\n\n\nReceives Commitment for $125 Million in New Money Financing to Support Operations During Restructuring\n\n\nRMR will Continue as Manager and Operations will Continue Uninterrupted During Restructuring\n\n\n NEWTON, Mass.--(BUSINESS WIRE)--\nOffice Properties Income Trust (“OPI” or the “Company”) today announced that it has entered into a Restructuring Support Agreement (“RSA”) with an ad hoc group (the “September 2029 Ad Hoc Group”) of certain holders of its senior secured notes due September 2029 (the “September 2029 Notes”) to restructure its corporate debt and allow the Company to substantially deleverage its balance sheet. The transactions contemplated by the RSA provide the Company with a significantly improved capital structure and reduced debt service obligations, including by the equitization of approximately $1 billion of existing notes, and allow the Company to increase liquidity while maintaining its business operations in the normal course.\n\n\nTo implement the restructuring contemplated by the RSA, OPI and certain of its subsidiaries have filed voluntary chapter 11 petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas, in Houston, Texas (the “Bankruptcy Court”). Throughout this process, The RMR Group (Nasdaq: RMR) will continue to manage the Company and lease and maintain its properties without interruption. The Company will continue to honor its agreements with tenants, brokers and vendors in the ordinary course.\n\n\nOPI has received a commitment for $125 million in new money, debtor-in-possession (“DIP”) financing from the September 2029 Ad Hoc Group to be syndicated to other holders of the September 2029 Notes. Upon Bankruptcy Court approval, this additional financing, together with cash generated from the Company's ongoing operations, is expected to support the business during the court-supervised process.\n\n\nYael Duffy, President and Chief Operating Officer of OPI, made the following comment:\n\n\n“Following a thorough review of strategies to address OPI’s funded debt obligations, we are pleased to have reached an agreement with certain noteholders that will meaningfully strengthen OPI’s balance sheet by reducing leverage, lowering debt service obligations and simplifying its c...