NOTE 6 – DEBT, NET OF DEFERRED FINANCING COSTS

At December 31, 2025, our debt consisted of (1) $590 million of non-amortizing term loans and (2) $625 million of senior unsecured fixed rate notes. At December 31, 2024, our debt consisted of (1) $515 million of non-amortizing term loans and (2) $625 million of senior unsecured fixed rate notes. There were no outstanding borrowings under the revolving credit facility at December 31, 2025. The outstanding borrowings under the revolving credit facility were $5 million at December 31, 2024. At December 31, 2025 and 2024, there were no outstanding letters of credit. At December 31, 2025, we had $350 million of borrowing capacity under the revolving credit facility. The revolving credit facility will mature on February 1, 2029 with two six-month extension options. The weighted average interest rate on the term loans before consideration of the interest rate hedges described in Note 7 - Derivative Financial Instruments was 4.74% and 5.62% at December 31, 2025 and 2024, respectively. The weighted average interest rate on the revolving credit facility was 4.73% and 5.46% at December 31, 2025 and 2024, respectively.

Revolving Credit and Term Loan Agreement

On January 31, 2025, the Company and its subsidiary, FCPT OP, entered into a Fourth Amended and Restated Revolving Credit and Term Loan Agreement with a group of existing lenders (the “Credit Agreement”), which amended and restated in its entirety an existing Third Amended and Restated Revolving Credit and Term Loan Agreement dated as of October 25, 2022 (the "Prior Credit Agreement"). Prior to entering into the Credit Agreement, certain amounts outstanding under the term loan facility pursuant to the Prior Credit Agreement were scheduled to mature as follows: $150 million principal amount outstanding was scheduled to mature on November 9, 2025, $100 million principal amount outstanding was scheduled to mature on November 9, 2026, $90 million principal amount outstanding was scheduled to mature on January 9, 2027, $85 million principal amount outstanding was scheduled to mature on March 14, 2027, and $90 million principal amount outstanding was scheduled to mature on January 9, 2028.

The Credit Agreement provides for borrowings up to $940 million, consisting of (1) a revolving credit facility in an aggregate principal amount of $350 million and term loans in an aggregate principal amount of $590 million comprised of (i) a $100 million term loan with a maturity date of November 9, 2026 (the "Term Loan A-2 Facility"), (ii) a $90 million term loan with a maturity date of February 1, 2027 (the "Term Loan A-3 Facility"), (iii) an $85 million term loan with a maturity date of March 14, 2027 (the "Term Loan A-5 Facility"), (iv) a $90 million term loan with a maturity date of February 1, 2028 (the "Term Loan A-4 Facility"), and (v) a $225 million term loan with a maturity date of February 1, 2029 (the "Term Loan A-1 Facility"). No amortization payments are required on the term loan prior to the maturity date. FCPT OP has the option to extend the maturity date of the revolving credit facility for up to two six month periods, subject to the payment of an extension fee of 0.0625% on the aggregate amount of the then-outstanding revolving commitment. FCPT OP has the option to extend the maturity date of each of the Term Loan A-1 Facility and the Term Loan A-2 Facility by one year, subject to the payment of an extension fee of 0.125% on the then-outstanding principal amount of term loans under the Term Loan A-1 Facility and the Term Loan A-2 Facility, as applicable. FCPT OP has the option to extend the maturity date of the Term Loan A-5 Facility by one year, subject to the payment of an extension fee of 0.15% on the then-outstanding principal amount of term loans under the Term Loan A-5 Facility. The Credit Agreement is a syndicated credit facility that contains an accordion feature allowing the facility to be increased by an additional aggregate amount not to exceed $450 million, subject to certain conditions. Amounts owed under the Credit Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which SOFR rate election is in effect.

On August 19, 2025, the Company entered into Amendment No. 1 to the Credit Agreement which reduced the credit spread adjustment applicable to the revolving credit and term loan agreement from 0.10% to 0.00%. Term loans under the Credit Agreement now accrue interest at a per annum rate equal to a SOFR rate plus a margin of 0.95% to 1.00%, and the revolver accrues interest at a per annum rate equal to a margin of 0.85%. The margin is based on the highest applicable credit rating on its senior, unsecured, long-term indebtedness per the credit agreement. In the event that all or a portion of the principal amount of any loan borrowed pursuant to the Credit Agreement is not paid when due, interest will accrue at the rate that would otherwise be applicable thereto plus 2.00%. A facility fee at a rate of 0.20% per annum applies to the total revolving commitments available under the Credit Agreement.

The Credit Agreement contains customary events of default including, among other things, payment defaults, breach of covenants, cross acceleration to material indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events. The occurrence of an event of default will limit the ability of the Company and FCPT OP to make distributions and may result in the termination of the credit facility, acceleration of repayment obligations and the exercise of remedies by the Lenders with respect to the collateral.

We reviewed the Credit Agreement in accordance with U.S. GAAP. This resulted in the capitalization of $6.7 million in new lender fees and third party costs, which will be amortized over the life of the new loans; $120 thousand in third-party fees were recorded to general and administrative expense. Where there were decreases in principal, we wrote off unamortized deferred financing costs, which resulted in $40 thousand of unamortized deferred financing costs being written off and recorded as interest expense. The remaining $3.5 million of original unamortized deferred financing costs will be amortized over the life of the new loans.

Note Purchase Agreements

The Note Purchase Agreements contain customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the purchasers may, among other remedies, accelerate the payment of all obligations.

The Note Purchase Agreements have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States or any other jurisdiction absent registration or an applicable exemption from the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction. FCPT OP offered and sold the notes.

Debt Maturities

Deferred Financing Costs

At December 31, 2025 and 2024, term loan and revolving credit facility net unamortized deferred financing costs were approximately $8.1 million and $3.7 million, respectively. During the years ended December 31, 2025, 2024, and 2023, amortization of deferred financing costs was $2.5 million, $1.9 million, and $1.6 million, respectively. Interest expense for the twelve months ended December 31, 2025 includes a one-time charge of $40 thousand for deferred financing costs expensed as a result of the execution of an amendment to the term loan agreement on January 31, 2025.

At December 31, 2025 and 2024, senior unsecured notes net unamortized deferred financing costs were approximately $2.7 million and $3.4 million, respectively. During the years ended December 31, 2025, 2024, and 2023, amortization of deferred financing costs was $0.7 million, $0.7 million, and $0.7 million, respectively.

Debt Covenants

Under the terms of both the Note Purchase Agreement and Loan Agreement (the “Agreements”), FCPT acts as a guarantor to FCPT OP. The Agreements contain customary financial covenants, including (1) total indebtedness to consolidated capitalization value (each as defined in the Loan Agreement) not to exceed 60%, (2) mortgage-secured leverage ratio not to exceed 40%, (3) minimum fixed charge coverage ratio of 1.50 to 1.00, (4) maximum unencumbered leverage ratio not to exceed 60%, and (5) minimum unencumbered interest coverage ratio not less than 1.75 to 1.00. They also contain restrictive covenants that, among other things, restrict the ability of FCPT OP, the Company and their subsidiaries to enter into transactions with affiliates, merge, consolidate, create liens or make certain restricted payments. In addition, the Agreements include provisions providing that certain of such covenants will be automatically amended in the Note Purchase Agreement to conform to certain amendments that may from time to time be implemented to corresponding covenants under the Loan Agreement. At December 31, 2025, the Company was in compliance with all debt covenants.