Seven Hills Realty TrustSEVN
Seven Hills Realty Trust Debt Disclosure
Secured Financing Agreements
As of December 31, 2025 and 2024, we had secured financing facilities governed by master repurchase agreements with Wells Fargo, National Association, or Wells Fargo, Citibank N.A., or Citibank, and UBS AG, or UBS; and a facility loan program with BMO Harris Bank N.A, or BMO. We refer to the Wells Fargo, Citibank and UBS facilities as our Master Repurchase Facilities and the BMO facility as our BMO Facility. Collectively, we refer to our Master Repurchase Facilities and the BMO Facility as our Secured Financing Facilities.
Pursuant to our Master Repurchase Facilities, we may sell to, and later repurchase from the respective lender, the purchased assets related to the applicable facility. The initial purchase price paid under our Master Repurchase Facilities is generally between 75% and 80% of the market value or the unpaid principal balance of such purchased asset. Our Master Repurchase Facilities each contain margin maintenance provisions that provide our lenders with the right, in certain circumstances related to a credit event, to redetermine the value of purchased assets. Where a decline in the value of a purchased asset results in a margin deficit, we may be required to eliminate such a deficit through a combination of purchased asset repurchases and cash transfers.
Pursuant to our BMO Facility, BMO advances amounts to fund new mortgage loan originations and/or fund future obligations under existing loans. Advances under the BMO Facility are secured by a security interest and collateral assignment of the underlying loan, are coterminous with the pledged mortgage loans, generally up to an 80% advance rate and are not subject to margin calls.
In connection with each of our Secured Financing Facilities, we entered into guarantees that require us to guarantee 25% of the aggregate purchase price of the asset and also contain financial covenants, which require us to maintain a minimum tangible net worth, a minimum liquidity and a minimum interest coverage ratio and to satisfy a total indebtedness to stockholders’ equity ratio. Interest expense under our Secured Financing Facilities accrues at a rate of SOFR plus a premium.
In February 2026, we amended the Wells Fargo Master Repurchase Agreement and made certain changes to the agreement, including extending the stated maturity date to March 13, 2028 and increasing the maximum facility size by $125,000 to $250,000.
In February 2026, we amended our UBS Master Repurchase Agreement to extend the stated maturity date to February 18, 2028.
As of December 31, 2025, we were in compliance with the covenants and other terms of the agreements that govern our Secured Financing Facilities.
The table below summarizes our Secured Financing Facilities as of December 31, 2025 and 2024:
| Debt Obligation | ||||||||||||||||||||||||||||||||||||||||||||
| Weighted Average | Collateral | |||||||||||||||||||||||||||||||||||||||||||
| Maximum Facility Size | Principal Balance | Carrying Value | Coupon Rate (1) | Remaining Maturity (years) (2) | Maturity Date | Principal Balance | ||||||||||||||||||||||||||||||||||||||
| December 31, 2025: | ||||||||||||||||||||||||||||||||||||||||||||
UBS Master Repurchase Facility (3) | $ | 250,000 | $ | 194,948 | $ | 194,887 | 6.19 | % | 0.1 | 2/18/2026 | $ | 278,594 | ||||||||||||||||||||||||||||||||
| Citibank Master Repurchase Facility | 215,000 | 135,715 | 135,426 | 5.84 | % | 0.7 | 9/27/2026 | 199,838 | ||||||||||||||||||||||||||||||||||||
| BMO Facility | 150,000 | 64,632 | 64,442 | 5.81 | % | 0.9 | Various | 88,684 | ||||||||||||||||||||||||||||||||||||
Wells Fargo Master Repurchase Facility (4) | 125,000 | 92,980 | 92,902 | 5.54 | % | 0.2 | 3/11/2026 | 120,469 | ||||||||||||||||||||||||||||||||||||
| Total/weighted average | $ | 740,000 | $ | 488,275 | $ | 487,657 | 5.92 | % | 0.4 | $ | 687,585 | |||||||||||||||||||||||||||||||||
| December 31, 2024: | ||||||||||||||||||||||||||||||||||||||||||||
| UBS Master Repurchase Facility | $ | 250,000 | $ | 181,989 | $ | 181,566 | 6.85 | % | 0.7 | 2/18/2026 | $ | 267,084 | ||||||||||||||||||||||||||||||||
| Citibank Master Repurchase Facility | 215,000 | 93,314 | 92,700 | 6.57 | % | 1.5 | 9/27/2026 | 145,520 | ||||||||||||||||||||||||||||||||||||
| BMO Facility | 150,000 | 103,855 | 103,622 | 6.39 | % | 0.9 | Various | 145,234 | ||||||||||||||||||||||||||||||||||||
| Wells Fargo Master Repurchase Facility | 125,000 | 40,464 | 39,908 | 6.31 | % | 0.6 | 3/11/2026 | 52,973 | ||||||||||||||||||||||||||||||||||||
| Total/weighted average | $ | 740,000 | $ | 419,622 | $ | 417,796 | 6.62 | % | 0.9 | $ | 610,811 | |||||||||||||||||||||||||||||||||
(1)The weighted average coupon rate is determined using SOFR plus a spread ranging from 1.50% to 2.95%, as applicable, for the respective borrowings under our Secured Financing Facilities as of the applicable date.
(2)The weighted average remaining maturity of our Master Repurchase Facilities is determined using the earlier of the underlying loan investment maturity date and the respective repurchase agreement maturity date. The weighted average remaining maturity of the BMO Facility is determined using the underlying loan investment maturity date.
(3)In February 2026, we extended the stated maturity date to February 18, 2028.
(4)In February 2026, we extended the stated maturity date to March 13, 2028 and increased the maximum facility size by $125,000 to $250,000.
As of December 31, 2025, our outstanding borrowings under our Secured Financing Facilities had the following remaining maturities:
| Maturity Year | Principal Payments on Secured Financing Facilities | |||||||
| 2026 | $ | 472,187 | ||||||
| 2027 | 16,088 | |||||||
| 2028 and thereafter | — | |||||||
| $ | 488,275 | |||||||
Based upon the performance and payment history of our commercial mortgage loans, along with our ability to obtain financing under repurchase agreements and success in extending certain of our existing Master Repurchase Agreements, we believe it is probable that we will extend our Master Repurchase Facilities prior to their maturities.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.