Terra Property Trust, Inc.TPTA
Terra Property Trust, Inc. Debt Disclosure
Debt
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Unsecured Notes Payable
The following table presents a summary of the Company’s unsecured notes payable outstanding as of:
| Coupon Rate | Effective Rate (1) | Maturity Date | December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
6.00% Senior Notes Due 2026 (2) | 6.00 | % | 7.00 | % | 6/30/2026 | $ | 80,388,375 | $ | 85,125,000 | |||||||||||||||||||||||
7.00% Senior Notes Due 2026 (3) | 7.00 | % | 11.16 | % | 3/31/2026 | 38,375,000 | 38,375,000 | |||||||||||||||||||||||||
| Total principal amount | 118,763,375 | 123,500,000 | ||||||||||||||||||||||||||||||
| Unamortized issue discount | (312,026) | (902,312) | ||||||||||||||||||||||||||||||
Unamortized purchase discount (3) | (391,525) | (1,853,316) | ||||||||||||||||||||||||||||||
| Unamortized deferred financing costs | (110,750) | (320,272) | ||||||||||||||||||||||||||||||
| Unsecured notes payable, net | $ | 117,949,074 | $ | 120,424,100 | ||||||||||||||||||||||||||||
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(1)Includes issue discount, purchase discount and deferred financing costs that are amortized to interest expense over the life of the notes.
(2)From time to time, the Company may repurchase certain of its 6.00% Senior Notes Due 2026 and 7.00% Senior Notes Due 2026. During 2025, the Company repurchased and retired 189,465 units of the 6.00% Senior Notes Due 2026 for $4.2 million and recognized a gain on extinguishment of debt of $0.5 million.
(3)In connection with the BDC Merger, Terra LLC assumed all the obligations under the 7.00% Senior Notes Due 2026 (as defined below) and recorded a purchase discount of $4.6 million, representing the difference between the carrying value and the fair value of the notes on the date of the merger.
The 6.00% Senior Notes Due 2026
On June 10, 2021, Terra Property Trust issued $78.5 million in aggregate principal amount of its 6.00% notes due 2026, and on June 25, 2021, the underwriters partially exercised their option to purchase an additional $6.6 million of the notes (collectively the “6.00% Senior Notes Due 2026”). The 6.00% Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra Property Trust’s option on or after June 10, 2023, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest.
The 7.00% Senior Notes Due 2026
On February 10, 2021, Terra BDC issued $34.8 million in aggregate principal amount of 7.00% fixed-rate notes due 2026, and on February 26, 2021, the underwriters exercised the option to purchase an additional $3.6 million of the notes (collectively the “7.00% Senior Notes Due 2026”). In connection with the BDC Merger, Terra LLC agreed to take all necessary action to assume the payment of the principal of and interest on all of the outstanding 7.00% Senior Notes Due 2026. The 7.00% Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra LLC’s option on or after February 10, 2023, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest.
Covenant Compliance
The Company’s unsecured notes payable contain certain financial covenants. As of December 31, 2025, the Company was in compliance with such covenants.
Secured Financing Arrangements
The following table is a summary of the Company’s secured financing agreements in place as of:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Current Maturity | Extended Maturity | Weighted Average Interest Rate (1) | Pledged Asset Carrying Value | Maximum Facility Size | Principal Amount | Principal Amount | ||||||||||||||||||||||||||||||||||||||
| Repurchase Agreements: | ||||||||||||||||||||||||||||||||||||||||||||
Goldman Sachs Bank facility (2) | (2) | (2) | (2) | $ | — | $ | — | $ | — | $ | 48,188,441 | |||||||||||||||||||||||||||||||||
| Total | — | — | — | 48,188,441 | ||||||||||||||||||||||||||||||||||||||||
| Non-Recourse Financing: | ||||||||||||||||||||||||||||||||||||||||||||
Promissory notes payable (3) | (3) | (3) | (3) | — | N/A | — | 40,694,390 | |||||||||||||||||||||||||||||||||||||
| Property mortgages - fixed rate | June 2028 | June 2028 | 6.25 | % | 47,359,761 | N/A | 20,700,000 | 40,250,000 | ||||||||||||||||||||||||||||||||||||
Property mortgages - variable rate (4) | (4) | (4) | (4) | — | N/A | — | 34,100,000 | |||||||||||||||||||||||||||||||||||||
| Total | 47,359,761 | 20,700,000 | 115,044,390 | |||||||||||||||||||||||||||||||||||||||||
| Other Secured Financing: | ||||||||||||||||||||||||||||||||||||||||||||
Revolving line of credit (5) | (5) | (5) | (5) | — | — | — | 16,361,111 | |||||||||||||||||||||||||||||||||||||
Term loan (6) | December 2027 | December 2028 | 9.00 | % | 40,193,442 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||||||||||||||||||||
Secured borrowings (7) | Nov 2026 - Jun 2027 | Nov 2026 - Jun 2027 | 9.54 | % | 64,009,058 | 31,250,000 | 31,250,000 | 18,000,000 | ||||||||||||||||||||||||||||||||||||
| Total | 104,202,500 | 41,250,000 | 41,250,000 | 44,361,111 | ||||||||||||||||||||||||||||||||||||||||
| $ | 151,562,261 | $ | 41,250,000 | 61,950,000 | 207,593,942 | |||||||||||||||||||||||||||||||||||||||
| Unamortized deferred financing costs and other | (1,041,904) | (1,875,160) | ||||||||||||||||||||||||||||||||||||||||||
| Secured financing agreements, net | $ | 60,908,096 | $ | 205,718,782 | ||||||||||||||||||||||||||||||||||||||||
(1)Amount is calculated using the applicable index rate as of December 31, 2025.
(2)In June 2025, the outstanding balance was repaid in full and the facility was terminated.
(3)In November 2025, the promissory notes were repaid in full.
(4)In August 2025, the pledged asset was sold and the outstanding balance was repaid in full (Note 5).
(5)On July 1, 2025, the outstanding balance was repaid in full and the facility was terminated.
(6)In December 2024, through a series of transactions, a wholly owned subsidiary of the Company issued a $10.0 million term loan payable to an entity in which the Company has an equity investment in exchange for the satisfaction of the remaining funding commitment of the Company to that entity (Note 4). The term loan payable is collateralized by the Company’s
equity interest in RESOF and the Company serves as a guarantor under the loan. Under the terms of the loan agreement, the Company is required to maintain certain loan-to-value ratio and investment rating. Additionally, the Company’s interest in RESOF is only available to pay the debt under the term loan and not available to pay the debt under any other financing arrangements.
(7)Interest rates are based on Term SOFR plus a spread of 5.0% with a combined floor rate ranging from 9.32% to 9.85%. These facilities are used to finance the Company’s senior loan investments.
In the normal course of business, the Company is in discussions with its lenders to extend, amend, or replace any financing facilities which contain near term expirations.
The following table presents certain information about the Company’s secured financing agreements:
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Amortization of deferred financing costs and others | $ | 1,533,223 | $ | 2,921,917 | ||||||||||
| Proceeds from secured financing | $ | 24,805,321 | $ | 81,284,441 | ||||||||||
| Principal repayments on secured financing | $ | (170,854,544) | $ | (177,525,167) | ||||||||||
Covenant Compliance
The Company’s secured financing agreements contain certain financial tests and covenants. In the event of a default or any breach of covenant of a related agreement, the lender has the right to accelerate all amounts due, charge interest at a default rate, retain all cash flow from the loans originated and/or sell such loans in a private sale on terms possibly unfavorable to the Company. As of December 31, 2025, the Company was in compliance with all such covenants, as amended or waived.
Scheduled Debt Principal Payments
Scheduled debt principal payments for each of the five calendar years following December 31, 2025 are as follows:
| Years Ending December 31, | Total | |||||||
| 2026 | 132,013,375 | |||||||
| 2027 | 28,000,000 | |||||||
| 2028 | 20,700,000 | |||||||
| 2029 | — | |||||||
| 2030 | — | |||||||
| 180,713,375 | ||||||||
| Unamortized deferred financing costs and other | (1,856,205) | |||||||
| Total | $ | 178,857,170 | ||||||
Obligations Under Participation Agreements
As discussed in Note 2, the Company follows the guidance in ASC 860 when accounting for loan participations. Such guidance requires the transferred interests meet certain criteria in order for the transaction to be recorded as a sale. Loan participations from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements. As of December 31, 2025 and 2024, obligations under participation agreements were $18.2 million and $18.2 million, respectively (see “Participation Agreements” in Note 7). The interest rate on the obligations under participation agreements was 18.79% and 19.53%, respectively.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 13, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 19, 2021 | |
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.